10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

⌧ Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended October 3, 2020 or

☐ Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _____ to _____

Commission File Number 0-6966

ESCALADE, INCORPORATED

(Exact name of registrant as specified in its charter)

Indiana	13-2739290
(State of incorporation)	(I.R.S. EIN)

817 Maxwell Ave, Evansville, Indiana	47711
(Address of principal executive office)	(Zip Code)

812-467-1358

(Registrant’s Telephone Number)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of Exchange on which registered
Common Stock, No Par Value	ESCA	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ⌧ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ⌧ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Smaller reporting company ⌧
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.       ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ⌧

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at October 26, 2020
Common, no par value	14,169,404

INDEX

		Page No.
Part I.	Financial Information:
Item 1 -	Financial Statements:
	Consolidated Condensed Balance Sheets as of October 3, 2020, December 28, 2019, and October 5, 2019	3
	Consolidated Condensed Statements of Operations for the Three Months and Nine Months Ended October 3, 2020 and October 5, 2019	4
	Consolidated Condensed Statements of Stockholders’ Equity for the Three Months and Nine Months Ended October 3, 2020 and October 5, 2019	5
	Consolidated Condensed Statements of Cash Flows for the Nine Months Ended October 3, 2020 and October 5, 2019	6
	Notes to Consolidated Condensed Financial Statements	7
Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13
Item 3 -	Quantitative and Qualitative Disclosures About Market Risk	15
Item 4 -	Controls and Procedures	15
Part II.	Other Information
Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 6 -	Exhibits	18
	Signature	19

2

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

ESCALADE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

	October 3,		December 28,		October 5,
All Amounts in Thousands Except Share Information	2020		2019		2019
	(Unaudited)		(Audited)		(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	6,811	$	5,882	$	5,226
Receivables, less allowance of $798; $483; and $519; respectively		63,750		35,450		35,592
Inventories		63,738		42,269		48,424
Prepaid expenses		2,580		3,151		2,696
Prepaid income tax		—		163		1,613
TOTAL CURRENT ASSETS		136,879		86,915		93,551
Property, plant and equipment, net		16,029		15,111		15,207
Operating lease right-of-use assets		1,271		1,080		1,242
Intangible assets, net		17,739		18,847		19,181
Goodwill		26,749		26,749		26,749
Other assets		49		77		86
TOTAL ASSETS	$	198,716	$	148,779	$	156,016
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Note payable	$	—	$	135	$	135
Trade accounts payable		32,102		7,765		9,947
Accrued liabilities		18,702		9,689		8,819
Income tax payable		1,675		—		—
Current operating lease liabilities		693		621		689
TOTAL CURRENT LIABILITIES		53,172		18,210		19,590
Other Liabilities:
Long-term debt		—		—		5,221
Deferred income tax liability		3,537		3,537		3,409
Operating lease liabilities		591		475		575
Other liabilities		387		387		1,094
TOTAL LIABILITIES		57,687		22,609		29,889
Stockholders’ Equity:
Preferred stock:
Authorized 1,000,000 shares; no par value, none issued
Common stock:
Authorized 30,000,000 shares; no par value, issued and outstanding – 14,169,404; 14,214,777; and 14,291,347; shares respectively		14,169		14,215		14,291
Retained earnings		126,860		111,955		111,836
TOTAL STOCKHOLDERS’ EQUITY		141,029		126,170		126,127
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	198,716	$	148,779	$	156,016

See notes to Consolidated Condensed Financial Statements.

3

ESCALADE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended				Nine Months Ended
	October 3,		October 5,		October 3,		October 5,
All Amounts in Thousands Except Per Share Data	2020		2019		2020		2019
Net sales	$	78,069	$	45,756	$	198,882	$	133,497
Costs and Expenses
Cost of products sold		54,548		35,717		141,911		102,022
Selling, administrative and general expenses		10,374		6,793		29,752		24,576
Amortization		332		347		1,108		1,135
Operating Income		12,815		2,899		26,111		5,764
Other Income (Expense)
Interest expense		(44)		(96)		(148)		(295)
Other income		40		3		108		12
Income Before Income Taxes		12,811		2,806		26,071		5,481
Provision for Income Taxes		2,625		266		5,224		798
Net Income	$	10,186	$	2,540	$	20,847	$	4,683
Earnings Per Share Data:
Basic earnings per share	$	0.72	$	0.18	$	1.48	$	0.32
Diluted earnings per share	$	0.71	$	0.18	$	1.47	$	0.32
Dividends declared	$	0.140	$	0.125	$	0.390	$	0.375

See notes to Consolidated Condensed Financial Statements.

4

ESCALADE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

	Common Stock			Retained
All Amounts in Thousands	Shares	Amount		Earnings		Total
Balances at July 13, 2019	14,468	$	14,468	$	112,775	$	127,243
Net income					2,540		2,540
Expense of stock options and restricted stock units					68		68
Dividends declared					(1,805)		(1,805)
Purchase of stock	(177)		(177)		(1,742)		(1,919)
Balances at October 5, 2019	14,291	$	14,291	$	111,836	$	126,127
Balances at December 29, 2018	14,439	$	14,439	$	113,882	$	128,321
Net income					4,683		4,683
Expense of stock options and restricted stock units					409		409
Exercise of stock options	10		10		108		118
Settlement of restricted stock units	25		25		(25)		—
Dividends declared					(5,423)		(5,423)
Purchase of stock	(192)		(192)		(1,891)		(2,083)
Stock issued to directors as compensation	9		9		93		102
Balances at October 5, 2019	14,291	$	14,291	$	111,836	$	126,127

	Common Stock			Retained
All Amounts in Thousands	Shares	Amount		Earnings		Total
Balances at July 11, 2020	14,154	$	14,154	$	118,410	$	132,564
Net income					10,186		10,186
Expense of stock options and restricted stock units					263		263
Settlement of restricted stock units	15		15		(15)		--
Dividends declared					(1,984)		(1,984)
Balances at October 3, 2020	14,169	$	14,169	$	126,860	$	141,029
Balances at December 28, 2019	14,215	$	14,215	$	111,955	$	126,170
Net income					20,847		20,847
Expense of stock options and restricted stock units					756		756
Settlement of restricted stock units	51		51		(51)		--
Issuance of restricted stock awards	35		35		(35)		--
Dividends declared					(5,515)		(5,515)
Purchase of stock	(142)		(142)		(1,184)		(1,326)
Stock issued to directors as compensation	10		10		87		97
Balances at October 3, 2020	14,169	$	14,169	$	126,860	$	141,029

See notes to Consolidated Condensed Financial Statements.

5

ESCALADE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Nine Months Ended
	October 3,		October 5,
All Amounts in Thousands	2020		2019
Operating Activities:
Net income	$	20,847	$	4,683
Depreciation and amortization		3,252		3,266
Provision for doubtful accounts		394		277
Loss (gain) on disposal of property and equipment		(2)		6
Stock-based compensation		756		409
Adjustments necessary to reconcile net income to net cash provided by operating activities		(14,378)		(1,453)
Net cash provided by operating activities		10,869		7,188
Investing Activities:
Purchase of property and equipment		(3,064)		(1,849)
Acquisitions		—		(765)
Payment on note payable related to an acquisition		(135)		—
Proceeds from sale of property and equipment		3		4
Net cash used by investing activities		(3,196)		(2,610)
Financing Activities:
Proceeds from long-term debt		8,493		65,191
Payments on long-term debt		(8,493)		(59,969)
Proceeds from exercise of stock options		—		118
Deferred financing fees		—		(112)
Purchase of stock		(1,326)		(2,083)
Cash dividends paid		(5,515)		(5,423)
Director stock compensation		97		102
Net cash used by financing activities		(6,744)		(2,176)
Net increase in cash and cash equivalents		929		2,402
Cash and cash equivalents, beginning of period		5,882		2,824
Cash and cash equivalents, end of period	$	6,811	$	5,226
Non-Cash Transactions
Note payable for deferred purchase price obligation	$	—	$	135

See notes to Consolidated Condensed Financial Statements.

6

ESCALADE, INCORPORATED AND SUBSIDIARIES

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

Note A – Summary of Significant Accounting Policies

Presentation of Consolidated Condensed Financial Statements – The significant accounting policies followed by the Company and its wholly owned subsidiaries for interim financial reporting are consistent with the accounting policies followed for its annual financial reporting. All adjustments that are of a normal recurring nature and are in the opinion of management necessary for a fair statement of the results for the periods reported have been included in the accompanying consolidated condensed financial statements. The consolidated condensed balance sheet of the Company as of December 28, 2019 has been derived from the audited consolidated balance sheet of the Company as of that date. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K annual report for 2019 filed with the Securities and Exchange Commission.

Reclassifications - Certain reclassifications have been made to prior year financial statements to conform to the current year financial statement presentation. These reclassifications had no effect on net earnings.

Note B – Seasonal Aspects

The results of operations for the three and nine month periods ended October 3, 2020 and October 5, 2019 are not necessarily indicative of the results to be expected for the full year.

Note C – Inventories

	October 3,		December 28,		October 5,
In thousands	2020		2019		2019
Raw materials	$	8,446	$	3,186	$	3,860
Work in progress		4,217		2,177		2,410
Finished goods		51,075		36,906		42,154
	$	63,738	$	42,269	$	48,424

Note D – Fair Values of Financial Instruments

The following methods were used to estimate the fair value of all financial instruments recognized in the accompanying balance sheets at amounts other than fair values.

Cash and Cash Equivalents

Fair values of cash and cash equivalents approximate cost due to the short period of time to maturity.

Long-term Debt

Fair values of long-term debt is estimated based on borrowing rates currently available to the Company for bank loans with similar terms and maturities and determined through the use of a discounted cash flow model.

7

The following table presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall in accordance with FASB ASC 825 at October 3, 2020, December 28, 2019 and October 5, 2019.

			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets		Significant Other		Unobservable
October 3, 2020	Carrying		for Identical		Observable Inputs		Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	6,811	$	6,811	$	—	$	—

			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets		Significant Other		Unobservable
December 28, 2019	Carrying		for Identical		Observable Inputs		Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	5,882	$	5,882	$	—	$	—

			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets		Significant Other		Unobservable
October 5, 2019	Carrying		for Identical		Observable Inputs		Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	5,226	$	5,226	$	—	$	—
Financial liabilities
Long-term debt	$	5,221	$	—	$	5,221	$	—

Note E – Stock Compensation

The fair value of stock-based compensation is recognized in accordance with the provisions of FASB ASC 718, Stock Compensation.

During the nine months ended October 3, 2020 and pursuant to the 2017 Incentive Plan, in lieu of cash payments of director fees, the Company awarded to certain directors 9,448 shares of common stock. During the nine months ended October 3, 2020, the Company awarded 22,850 restricted stock units to directors, 113,669 restricted stock units and 35,000 shares of restricted stock to employees. The restricted stock units awarded to directors time vest over two years (one-half one year from grant date and one-half two years from grant date) provided that the director is still a director of the Company at the vest date. Director restricted stock units are subject to forfeiture, except for termination of services as a result of retirement, death or disability, if on the vesting date the director no longer holds a position with the Company. All of the 2020 restricted stock units awarded to employees time vest over three years (one-third one year from grant, one-third two years from grant and one-third three years from grant) provided that the employee is still employed by the Company on the vesting date, and 18,268 of such restricted stock units are also subject to performance conditions. The 35,000 shares of restricted stock vest over three years (40% one year from grant, 30% two years from grant and 30% three years from grant) provided that the employee is still employed by the Company on the vesting date.

For the three and nine months ended October 3, 2020, including expense associated with issuing certain directors stock in lieu of cash for certain director fees, the Company recognized stock based compensation expense of $263 thousand and $853 thousand, respectively compared to stock based compensation expense of $68 thousand and $511 thousand for the same periods in the prior year. At October 3, 2020 and October 5, 2019, respectively, there was $1.2 million and $0.8 million in unrecognized stock-based compensation expense related to non-vested stock awards.

8

Note F – Segment Information

	For the Three Months
	Ended October 3, 2020
In thousands	Sporting Goods		Corp.		Total
Revenues from external customers	$	78,069	$	—	$	78,069
Operating income (loss)		13,177		(362)		12,815
Net income		9,554		632		10,186

	As of and for the Nine Months
	Ended October 3, 2020
In thousands	Sporting Goods		Corp.		Total
Revenues from external customers	$	198,882	$	—	$	198,882
Operating income (loss)		27,640		(1,529)		26,111
Net income		20,017		830		20,847
Total assets	$	190,309	$	8,407	$	198,716

	For the Three Months
	Ended October 5, 2019
In thousands	Sporting Goods		Corp.		Total
Revenues from external customers	$	45,756	$	—	$	45,756
Operating income (loss)		3,223		(324)		2,899
Net income		2,269		271		2,540

	As of and for the Nine Months
	Ended October 5, 2019
In thousands	Sporting Goods		Corp.		Total
Revenues from external customers	$	133,497	$	—	$	133,497
Operating income (loss)		7,001		(1,237)		5,764
Net income (loss)		4,871		(188)		4,683
Total assets	$	148,664	$	7,352	$	156,016

Note G – Dividend Payment

On September 21, 2020, the Company paid a quarterly dividend of $0.14 per common share to all shareholders of record on September 14, 2020. The total amount of the dividend was approximately $2.0 million and was charged against retained earnings.

On June 8, 2020, the Company paid a quarterly dividend of $0.125 per common share to all shareholders of record on June 1, 2020. The total amount of the dividend was approximately $1.7 million and was charged against retained earnings.

On March 16, 2020, the Company paid a quarterly dividend of $0.125 per common share to all shareholders of record on March 9, 2020. The total amount of the dividend was approximately $1.8 million and was charged against retained earnings.

Note H – Earnings Per Share

The shares used in computation of the Company’s basic and diluted earnings per common share are as follows:

	Three Months Ended		Nine Months Ended
	October 3,	October 5,	October 3,	October 5,
In thousands	2020	2019	2020	2019
Weighted average common shares outstanding	14,128	14,440	14,117	14,455
Dilutive effect of stock options and restricted stock units	137	28	105	30
Weighted average common shares outstanding, assuming dilution	14,265	14,468	14,222	14,485

9

Stock options that are anti-dilutive as to earnings per share and unvested restricted stock units which have a market condition for vesting that has not been achieved are ignored in the computation of dilutive earnings per share. The number of stock options and restricted stock units that were excluded in 2020 and 2019 were 57,569 and 80,950, respectively.

Note I – New Accounting Standards and Changes in Accounting Principles

With the exception of that discussed below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three and nine month periods ended October 3, 2020, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019, that are of significance, or potential significance to the Company.

In January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU) 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this update eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable.

The Company adopted this standard on December 29, 2019. The adoption of this standard did not have an impact to the financial statements of the Company.

Note J – Revenue from Contracts with Customers

Revenue Recognition – Effective December 31, 2017, we adopted ASC 606. The adoption of this standard did not impact the timing of revenue recognition for customer sales. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our goods at a point in time based on shipping terms and transfer of title. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Shipping and handling fees charged to customers are reported within revenue.

Gross-to-net sales adjustments – We recognize revenue net of various sales adjustments to arrive at net sales as reported on the statement of operations. These adjustments are referred to as gross-to-net sales adjustments and primarily fall into one of three categories; returns, warranties and customer allowances.

Returns – The Company records an accrued liability and reduction in sales for estimated product returns based upon historical experience. An accrued liability and reduction in sales is also recorded for approved return authorizations that have been communicated by the customer.

Warranties – Limited warranties are provided on certain products for varying periods. We record an accrued liability and reduction in sales for estimated future warranty claims based upon historical experience and management’s estimate of the level of future claims. Changes in the estimated amounts recognized in prior years are recorded as an adjustment to the accrued liability and sales in the current year.

Customer Allowances – Customer allowances are common practice in the industries in which the Company operates. These agreements are typically in the form of advertising subsidies, volume rebates and catalog allowances and are accounted for as a reduction to gross sales. The Company reviews such allowances on an ongoing basis and accruals are adjusted, if necessary, as additional information becomes available.

10

Disaggregation of Revenue – We generate revenue from the sale of widely recognized sporting goods brands in basketball goals, archery, indoor and outdoor game recreation and fitness products. These products are sold through multiple sales channels that include; mass merchants, specialty dealers, key on-line retailers (“E-commerce”) and international. The following table depicts the disaggregation of revenue according to sales channel:

	Three Months Ended				Nine Months Ended
	October 3,		October 5,		October 3,		October 5,
All Amounts in Thousands	2020		2019		2020		2019
Gross Sales by Channel:
Mass Merchants	$	36,234	$	20,757	$	77,418	$	51,025
Specialty Dealers		21,741		11,826		57,666		41,590
E-commerce		25,172		15,712		78,242		50,452
International		2,637		1,880		6,129		5,228
Other		598		637		1,669		2,079
Total Gross Sales		86,382		50,812		221,124		150,374
Less: Gross-to-Net Sales Adjustments
Returns		2,117		1,473		5,538		4,353
Warranties		376		360		1,152		1,092
Customer Allowances		5,820		3,223		15,552		11,432
Total Gross-to-Net Sales Adjustments		8,313		5,056		22,242		16,877
Total Net Sales	$	78,069	$	45,756	$	198,882	$	133,497

Note K – Leases

We have operating leases for office, manufacturing and distribution facilities as well as for certain equipment. Our leases have remaining lease terms of 1 year to 5 years. As of October 3, 2020, the Company has not entered into any lease arrangements classified as a finance lease.

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities and operating lease liabilities on our consolidated balance sheet. The Company has elected an accounting policy to not recognize short-term leases (one year or less) on the balance sheet. The Company also elected the package of practical expedients which applies to leases that commenced before the adoption date. By electing the package of practical expedients, the Company did not need to reassess the following; whether any existing contracts are or contain leases, the lease classification for any existing leases and initial direct costs for any existing leases.

ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. When the implicit rate of the lease is not provided or cannot be determined, we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise those options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Components of lease expense and other information as follows:

	Three Months Ended				Nine Months Ended
	October 3,		October 5,		October 3,		October 5,
All Amounts in Thousands	2020		2019		2020		2019
Lease Expense
Operating Lease Cost	$	197	$	164	$	610	$	608
Short-term Lease Cost		137		149		411		348
Variable Lease Cost		52		47		169		188
Total Operating Lease Cost		386	$	360	$	1,190	$	1,144
Operating Lease - Operating Cash Flows	$	182	$	156	$	557	$	552
New ROU Assets - Operating Leases	$	56	$	108	$	744	$	833

11

Other information about lease amounts recognized in our consolidated financial statements is summarized as follows:

	Nine Months Ended
	October 3,		October 5,
All Amounts in Thousands	2020		2019
Weighted Average Remaining Lease Term – Operating Leases	2.40	years	2.03	years
Weighted Average Discount Rate – Operating Leases	5.00	%	5.00	%

Future minimum lease payments under non-cancellable leases as of October 3, 2020 were as follows:

All Amounts in Thousands
Year 1	$	738
Year 2		330
Year 3		211
Year 4		53
Year 5		27
Thereafter		1
Total future minimum lease payments		1,360
Less imputed interest		(76)
Total	$	1,284
Reported as of October 3, 2020
Current operating lease liabilities		693
Long-term operating lease liabilities		591
Total	$	1,284

Note L – Commitments and Contingencies

The Company is involved in litigation arising in the normal course of business. The Company does not believe that the disposition or ultimate resolution of existing claims or lawsuits will have a material adverse effect on the business or financial condition of the Company.

12

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This report contains forward-looking statements relating to present or future trends or factors that are subject to risks and uncertainties. These risks include, but are not limited to: specific and overall impacts of the COVID-19 global pandemic on Escalade’s financial condition and results of operations; Escalade’s plans and expectations surrounding the transition to its new Chief Executive Officer and all potential related effects and consequences; the impact of competitive products and pricing; product demand and market acceptance; new product development; Escalade’s ability to achieve its business objectives, especially with respect to its Sporting Goods business on which it has chosen to focus; 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; the 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, labor strikes, natural disasters, public health crises such as the coronavirus pandemic, and other events and circumstances beyond our control; Escalade’s ability to control costs; Escalade’s ability to successfully implement actions to lessen the potential impacts of tariffs 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; general economic conditions; fluctuation in operating results; changes in foreign currency exchange rates; changes in the securities markets; Escalade’s ability to obtain financing and to maintain compliance with the terms of such financing; the availability, integration and effective operation of information systems and other technology, and the potential interruption of such systems or technology; risks related to data security of privacy breaches; 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.

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. The Company also sometimes divests or discontinues certain operations, assets, brands, and products that do not perform to the Company’s expectations or no longer fit with the Company’s strategic objectives.

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.

13

COVID-19 Pandemic

The emergence of the coronavirus (COVID-19) around the world, and particularly in the United States and China, presents significant risks to the Company, not all of which the Company is able to fully evaluate or even to foresee at the current time. Economic and health conditions in the United States and across most of the globe continue to change. In the short-term, demand for the Company’s products has increased, notably in our fitness products, basketball, playground, and indoor/outdoor games. Some of the increase in demand is likely due to consumers being required or encouraged by governmental authorities to stay at home, schools being closed, and employers requiring employees to work remotely and/or implementing furloughs and layoffs. Such increased demand may not continue and/or demand may decrease from historical levels depending on the duration and severity of the COVID-19 pandemic, the length of time it takes for normal economic and operating conditions to resume, additional governmental actions that may be taken and/or extensions of time for restrictions that have been imposed to date, and numerous other uncertainties.

In addition, increased customer demand for certain products presents challenges for the Company to anticipate and adjust inventory levels to meet such demand. So far, the Company has been able to obtain products from its suppliers on a timely basis, but management anticipates that there may be delays in the future due to factory and shipping capacities that may impact timing of shipments in the first half of 2021, if not sooner. The Company is seeking to alleviate such concerns by accelerating its timing for placing 2021 orders with its suppliers and by continuing to develop other potential sources of products and raw materials.

The COVID-19 pandemic continued to affect the Company’s operations in the third quarter and may continue to do so indefinitely thereafter. All of these factors may have far reaching impacts on the Company’s business, operations, and financial results and conditions, directly and indirectly, including without limitation impacts on the health of the Company’s management and employees –many of whom are still working remotely, manufacturing, distribution, marketing and sales operations, customer and consumer behaviors, and on the overall economy. The scope and nature of these impacts, most of which are beyond the Company’s control, continue to evolve and the outcomes are uncertain.

Due to the above circumstances and as described generally in this Form 10-Q, the Company’s results of operations for the three and nine month periods ended October 3, 2020 are not necessarily indicative of the results to be expected for the full fiscal year. Management cannot predict the full impact of the COVID-19 pandemic on the Company’s sales channels, supply chain, manufacturing and distribution nor to economic conditions generally, including the effects on consumer spending. The ultimate extent of the effects of the COVID-19 pandemic on the Company is highly uncertain and will depend on future developments, and such effects could exist for an extended period of time even after the pandemic might end.

Results of Operations

The following schedule sets forth certain consolidated statement of operations data as a percentage of net revenue:

	Three Months Ended				Nine Months Ended
	October 3, 2020		October 5, 2019		October 3, 2020		October 5, 2019
Net revenue	100.0	%	100.0	%	100.0	%	100.0	%
Cost of products sold	69.9	%	78.1	%	71.4	%	76.4	%
Gross margin	30.1	%	21.9	%	28.6	%	23.6	%
Selling, administrative and general expenses	13.3	%	14.8	%	15.0	%	18.4	%
Amortization	0.4	%	0.8	%	0.5	%	0.9	%
Operating income	16.4	%	6.3	%	13.1	%	4.3	%

Revenue and Gross Margin

Sales increased by 70.6% for the third quarter of 2020, compared with the same period in the prior year. The increase in sales was attributable to growth in nearly all of our product categories, but most notably in our archery, outdoor and fitness categories, including basketball, Lifeline Fitness and Victory Tailgate. For the first nine months of 2020, sales were up 49.0% compared to prior year.

The overall gross margin percentage increased to 30.1% for the third quarter of 2020, compared to 21.9% for 2019 primarily due to factory absorption and product mix.

Gross margin percentage increased to 28.6% for the first nine months of 2020, compared to 23.6% for the same period in the prior year.

14

Selling, General and Administrative Expenses

Selling, general and administrative expenses (SG&A) were $10.4 million for the third quarter of 2020 compared to $6.8 million for the same period in the prior year, an increase of $3.6 million or 52.7%. The increase in SG&A is in line with the growth of the business. SG&A as a percent of sales is 13.3% for the third quarter of 2020 compared with 14.8% for the same period in the prior year. For the first nine months of 2020, SG&A were $29.8 million compared to $24.6 million for the same period in 2019, an increase of $5.2 million or 21.1%. As a percent of sales, SG&A is 15.0% for the first nine months of 2020 compared with 18.4% for the same period in the prior year.

Provision for Income Taxes

The effective tax rate for the first nine months of 2020 was 20.0% compared to 14.6% for the same period last year.

Financial Condition and Liquidity

Total debt at the end of the first nine months of 2020 was zero, a decrease of $135 thousand from December 28, 2019. The following schedule summarizes the Company’s total debt:

	October 3,		December 28,		October 5,
In thousands	2020		2019		2019
Note payable	$	—	$	135	$	135
Long term debt		—		—		5,221
Total	$	—	$	135	$	5,356

As a percentage of stockholders’ equity, total debt was zero, 0.1% and 4.2% at October 3, 2020, December 28, 2019, and October 5, 2019 respectively.

On March 24, 2020, the Company entered into a Second Amendment to the Amended and Restated Credit Agreement (“2019 Restated Credit Agreement”) with its issuing bank, JP Morgan Chase Bank, N.A. (“Chase”), and the other lenders identified in the 2019 Restated Credit Agreement (collectively, the “Lender”). The sole purpose of the Second Amendment was to permit an increase in authorized stock repurchases, increasing the limit from $5,000,000 to $15,000,000.

The Company funds working capital requirements through operating cash flows and revolving credit agreements with its bank. Based on working capital requirements, the Company expects to have access to adequate levels of revolving credit to meet growth needs.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Required.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Escalade maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company’s Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure based closely on the definition of “disclosure controls and procedures” in Rules 13a-15(e) and 15d-15(e). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, could provide only reasonable assurance of achieving the desired control objectives, and management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective.

15

Changes in Internal Control over Financial Reporting

Management of the Company has evaluated, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, changes in the Company’s internal controls over financial reporting (as defined in Rule 13a-15(f) and 15d-15(f) of the Exchange Act) during the third quarter of 2020.

There have been no changes to the Company’s internal control over financial reporting that occurred since the beginning of the Company’s first quarter of 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

16

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS.

None.

Item 1A. RISK FACTORS.

None.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

c) Issuer Purchases of Equity Securities

				(c) Total Number	(d) Maximum Number
	(a) Total			of Shares (or Units)	(or Approximate Dollar
	Number of	(b) Average		Purchased as Part	Value) of Shares (or
	Shares (or	Price Paid		of Publicly	Units) that May Yet Be
	Units)	per Share		Announced Plans	Purchased Under the
Period	Purchased	(or Unit)		or Programs	Plans or Programs
Share purchases prior to 7/11/2020 under the current repurchase program.	1,397,490	$	9.28	1,397,490	$	10,000,330
Third quarter purchases:
7/12/2020–8/8/2020	None		None	No Change		No Change
8/9/2020-9/5/2020	None		None	No Change		No Change
9/6/2020-10/3/2020	None		None	No Change		No Change
Total share purchases under the current program	1,397,490	$	9.28	1,397,490	$	10,000,330

The Company has one stock repurchase program which was established in February 2003 by the Board of Directors and which initially authorized management to expend up to $3,000,000 to repurchase shares on the open market as well as in private negotiated transactions. In February 2005, February 2006, August 2007 and February 2008 the Board of Directors increased the remaining balance on this plan to its original level of $3,000,000. In September 2019, the Board of Directors increased the stock repurchase program from $3,000,000 to $5,000,000. On March 24, 2020, the Board of Directors increased the stock repurchase program from $5,000,000 to $15,000,000. No additional stock repurchases yet have been made pursuant to the increased amount now available for stock repurchases. From its inception date through October 3, 2020, the Company has repurchased 1,397,490 shares of its common stock under this repurchase program for an aggregate price of $12,966,498. The repurchase program has no termination date and there have been no share repurchases that were not part of a publicly announced program.

Item 3. DEFAULTS UPON SENIOR SECURITIES.

None.

Item 4. MINE SAFETY DISCLOSURES.

Not applicable.

Item 5. OTHER INFORMATION.

None.

17

Item 6. EXHIBITS

Number	Description
3.1	Articles of Incorporation of Escalade, Incorporated. Incorporated by reference from the Company’s 2007 First Quarter Report on Form 10-Q.
3.2	Amended By-laws of Escalade, Incorporated, as amended April 22, 2014. Incorporated by reference from the Company’s 2014 First Quarter Report on Form 10-Q.
31.1	Chief Executive Officer Rule 13a-14(a)/15d-14(a) Certification.
31.2	Chief Financial Officer Rule 13a-14(a)/15d-14(a) Certification.
32.1	Chief Executive Officer Section 1350 Certification.
32.2	Chief Financial Officer Section 1350 Certification.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document

18

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ESCALADE, INCORPORATED
Date: October 29, 2020	/s/ Stephen R. Wawrin
	Vice President and Chief Financial Officer
	(On behalf of the registrant and in his capacities as Principal Financial Officer and Principal Accounting Officer)

19

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Scott J. Sincerbeaux, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Escalade, Incorporated;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-15(f)) for the registrant and we have:

a)    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)    all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 29, 2020	/s/ Scott J. Sincerbeaux
	Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Stephen R. Wawrin, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Escalade, Incorporated;

2.     Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15-15(f)) for the registrant and we have:

a)    designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)    designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)    evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)    disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.     The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

a)    all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)    any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 29, 2020	/s/ Stephen R. Wawrin
	Vice President and Chief Financial Officer
	(On behalf of the registrant and in his
	capacities as Principal Financial Officer
	and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Escalade, Incorporated (the “Company”) on Form 10-Q for the period ended October 3, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Scott J. Sincerbeaux, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)          The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)          The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Scott J. Sincerbeaux

Chief Executive Officer

October 29, 2020

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Escalade, Incorporated (the “Company”) on Form 10-Q for the period ended October 3, 2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Stephen R. Wawrin, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)          The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)          The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Stephen R. Wawrin

Vice President and Chief Financial Officer

(On behalf of the registrant and in his

capacities as Principal Financial Officer

and Principal Accounting Officer)

October 29, 2020

XML

Document and Entity Information - shares	9 Months Ended
	Oct. 03, 2020	Oct. 26, 2020
Document and Entity Information
Document Type	10-Q
Document Quarterly Report	true
Document Transition Report	false
Entity File Number	0-6966
Entity Incorporation, State or Country Code	IN
Entity Address, Address Line One	817 Maxwell Ave
Entity Address, State or Province	IN
Entity Tax Identification Number	13-2739290
Entity Address, City or Town	Evansville
Entity Address, Postal Zip Code	47711
City Area Code	812
Local Phone Number	467-1358
Security Exchange Name	NASDAQ
Title of 12(b) Security	Common Stock, No Par Value
Amendment Flag	false
Document Period End Date	Oct. 03, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q3
Entity Registrant Name	ESCALADE, INCORPORATED
Entity Central Index Key	0000033488
Current Fiscal Year End Date	--12-26
Trading Symbol	ESCA
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		14,169,404

XML

CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Oct. 03, 2020	Dec. 28, 2019	Oct. 05, 2019
Current Assets:
Cash and cash equivalents	$ 6,811	$ 5,882	$ 5,226
Receivables, less allowance of $798; $483; and $519; respectively	63,750	35,450	35,592
Inventories	63,738	42,269	48,424
Prepaid expenses	2,580	3,151	2,696
Prepaid income tax		163	1,613
TOTAL CURRENT ASSETS	136,879	86,915	93,551
Property, plant and equipment, net	16,029	15,111	15,207
Operating lease right-of-use assets	1,271	1,080	1,242
Intangible assets, net	17,739	18,847	19,181
Goodwill	26,749	26,749	26,749
Other assets	49	77	86
TOTAL ASSETS	198,716	148,779	156,016
Current Liabilities:
Note payable		135	135
Trade accounts payable	32,102	7,765	9,947
Accrued liabilities	18,702	9,689	8,819
Income tax payable	1,675	0	0
Current operating lease liabilities	693	621	689
TOTAL CURRENT LIABILITIES	53,172	18,210	19,590
Other Liabilities:
Long-term debt		0	5,221
Deferred income tax liability	3,537	3,537	3,409
Operating lease liabilities	591	475	575
Other liabilities	387	387	1,094
TOTAL LIABILITIES	57,687	22,609	29,889
Stockholders' Equity:
Preferred stock: Authorized 1,000,000 shares; no par value, none issued
Common stock Authorized 30,000,000 shares; no par value, issued and outstanding - 14,169,404; 14,214,777; and 14,291,347; shares respectively	14,169	14,215	14,291
Retained earnings	126,860	111,955	111,836
TOTAL STOCKHOLDERS' EQUITY	141,029	126,170	126,127
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 198,716	$ 148,779	$ 156,016

XML

CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Oct. 03, 2020	Dec. 28, 2019	Oct. 05, 2019
CONSOLIDATED CONDENSED BALANCE SHEETS
Receivables allowance (in dollars)	$ 798	$ 483	$ 519
Preferred Stock, Par Value	$ 0	$ 0	$ 0
Preferred stock, shares authorized	1,000,000	1,000,000	1,000,000
Preferred stock, shares issued	0	0	0
Common stock, Par value	$ 0	$ 0	$ 0
Common stock, shares authorized	30,000,000	30,000,000	30,000,000
Common stock, shares issued	14,169,404	14,214,777	14,291,347
Common stock, shares outstanding	14,169,404	14,214,777	14,291,347

XML

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2020	Oct. 05, 2019	Oct. 03, 2020	Oct. 05, 2019
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Net sales	$ 78,069	$ 45,756	$ 198,882	$ 133,497
Costs and Expenses
Cost of products sold	54,548	35,717	141,911	102,022
Selling, administrative and general expenses	10,374	6,793	29,752	24,576
Amortization	332	347	1,108	1,135
Operating Income	12,815	2,899	26,111	5,764
Other Income (Expense)
Interest expense	(44)	(96)	(148)	(295)
Other income	40	3	108	12
Income Before Income Taxes	12,811	2,806	26,071	5,481
Provision for Income Taxes	2,625	266	5,224	798
Net Income	$ 10,186	$ 2,540	$ 20,847	$ 4,683
Earnings Per Share Data:
Basic earnings per share	$ 0.72	$ 0.18	$ 1.48	$ 0.32
Diluted earnings per share	0.71	0.18	1.47	0.32
Dividends declared	$ 0.140	$ 0.125	$ 0.390	$ 0.375

XML

CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY - USD ($) $ in Thousands	Common Stock	Retained Earnings	Total
Balance at Dec. 29, 2018	$ 14,439	$ 113,882	$ 128,321
Balance (in shares) at Dec. 29, 2018	14,439
Net income		4,683	4,683
Expense of stock options and restricted stock units		409	409
Exercise of stock options	$ 10	108	118
Exercise of stock options (in shares)	10
Settlement of restricted stock units	$ 25	(25)
Settlement of restricted stock units (in shares)	25
Dividends declared		(5,423)	(5,423)
Purchase of stock	$ (192)	(1,891)	(2,083)
Purchase of stock (in shares)	(192)
Stock issued to directors as compensation	$ 9	93	102
Stock issued to directors as compensation (in shares)	9
Balance at Oct. 05, 2019	$ 14,291	111,836	126,127
Balance (in shares) at Oct. 05, 2019	14,291
Balance at Jul. 13, 2019	$ 14,468	112,775	127,243
Balance (in shares) at Jul. 13, 2019	14,468
Net income		2,540	2,540
Expense of stock options and restricted stock units		68	68
Dividends declared		(1,805)	(1,805)
Purchase of stock	$ (177)	(1,742)	(1,919)
Purchase of stock (in shares)	(177)
Balance at Oct. 05, 2019	$ 14,291	111,836	126,127
Balance (in shares) at Oct. 05, 2019	14,291
Balance at Dec. 28, 2019	$ 14,215	111,955	126,170
Balance (in shares) at Dec. 28, 2019	14,215
Net income		20,847	20,847
Expense of stock options and restricted stock units		756	756
Settlement of restricted stock units	$ 51	(51)
Settlement of restricted stock units (in shares)	51
Issuance of restricted stock awards	$ 35	(35)
Issuance of restricted stock awards (in shares)	35
Dividends declared		(5,515)	(5,515)
Purchase of stock	$ (142)	(1,184)	(1,326)
Purchase of stock (in shares)	(142)
Stock issued to directors as compensation	$ 10	87	97
Stock issued to directors as compensation (in shares)	10
Balance at Oct. 03, 2020	$ 14,169	126,860	141,029
Balance (in shares) at Oct. 03, 2020	14,169
Balance at Jul. 11, 2020	$ 14,154	118,410	132,564
Balance (in shares) at Jul. 11, 2020	14,154
Net income		10,186	10,186
Expense of stock options and restricted stock units		263	263
Settlement of restricted stock units	$ 15	(15)
Settlement of restricted stock units (in shares)	15
Dividends declared		(1,984)	(1,984)
Balance at Oct. 03, 2020	$ 14,169	$ 126,860	$ 141,029
Balance (in shares) at Oct. 03, 2020	14,169

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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Oct. 03, 2020	Oct. 05, 2019
Operating Activities:
Net income	$ 20,847	$ 4,683
Reconciling adjustments:
Depreciation and amortization	3,252	3,266
Provision for doubtful accounts	394	277
Loss (gain) on disposal of property and equipment	(2)	6
Stock-based compensation	756	409
Adjustments necessary to reconcile net income to net cash provided by operating activities	(14,378)	(1,453)
Net cash provided by operating activities	10,869	7,188
Investing Activities:
Purchase of property and equipment	(3,064)	(1,849)
Acquisitions		(765)
Payment on note payable related to an acquisition	(135)	0
Proceeds from sale of property and equipment	3	4
Net cash used by investing activities	(3,196)	(2,610)
Financing Activities:
Proceeds from long-term debt	8,493	65,191
Payments on long-term debt	(8,493)	(59,969)
Proceeds from exercise of stock options		118
Deferred financing fees		(112)
Purchase of stock	(1,326)	(2,083)
Cash dividends paid	(5,515)	(5,423)
Director stock compensation	97	102
Net cash used by financing activities	(6,744)	(2,176)
Net increase in cash and cash equivalents	929	2,402
Cash and cash equivalents, beginning of period	5,882	2,824
Cash and cash equivalents, end of period	$ 6,811	5,226
Non-Cash Transactions
Note payable for deferred purchase price obligation		$ (135)

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Summary of Significant Accounting Policies

9 Months Ended

Oct. 03, 2020

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note A – Summary of Significant Accounting Policies

Presentation of Consolidated Condensed Financial Statements – The significant accounting policies followed by the Company and its wholly owned subsidiaries for interim financial reporting are consistent with the accounting policies followed for its annual financial reporting. All adjustments that are of a normal recurring nature and are in the opinion of management necessary for a fair statement of the results for the periods reported have been included in the accompanying consolidated condensed financial statements. The consolidated condensed balance sheet of the Company as of December 28, 2019 has been derived from the audited consolidated balance sheet of the Company as of that date. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K annual report for 2019 filed with the Securities and Exchange Commission.

Reclassifications - Certain reclassifications have been made to prior year financial statements to conform to the current year financial statement presentation. These reclassifications had no effect on net earnings.

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Seasonal Aspects

9 Months Ended

Oct. 03, 2020

Seasonal Aspects

Seasonal Aspects

Note B – Seasonal Aspects

The results of operations for the three and nine month periods ended October 3, 2020 and October 5, 2019 are not necessarily indicative of the results to be expected for the full year.

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Inventories

9 Months Ended

Oct. 03, 2020

Inventories

Inventories

Note C – Inventories

	October 3,		December 28,		October 5,
In thousands	2020		2019		2019
Raw materials	$	8,446	$	3,186	$	3,860
Work in progress		4,217		2,177		2,410
Finished goods		51,075		36,906		42,154
	$	63,738	$	42,269	$	48,424

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Fair Values of Financial Instruments

9 Months Ended

Oct. 03, 2020

Fair Values of Financial Instruments

Fair Values of Financial Instruments

Note D – Fair Values of Financial Instruments

The following methods were used to estimate the fair value of all financial instruments recognized in the accompanying balance sheets at amounts other than fair values.

Cash and Cash Equivalents

Fair values of cash and cash equivalents approximate cost due to the short period of time to maturity.

Long-term Debt

Fair values of long-term debt is estimated based on borrowing rates currently available to the Company for bank loans with similar terms and maturities and determined through the use of a discounted cash flow model.

The following table presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall in accordance with FASB ASC 825 at October 3, 2020, December 28, 2019 and October 5, 2019.

			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets		Significant Other		Unobservable
October 3, 2020	Carrying		for Identical		Observable Inputs		Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	6,811	$	6,811	$	—	$	—

			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets		Significant Other		Unobservable
December 28, 2019	Carrying		for Identical		Observable Inputs		Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	5,882	$	5,882	$	—	$	—

			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets		Significant Other		Unobservable
October 5, 2019	Carrying		for Identical		Observable Inputs		Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	5,226	$	5,226	$	—	$	—
Financial liabilities
Long-term debt	$	5,221	$	—	$	5,221	$	—

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Stock Compensation

9 Months Ended

Oct. 03, 2020

Stock Compensation

Stock Compensation

Note E – Stock Compensation

The fair value of stock-based compensation is recognized in accordance with the provisions of FASB ASC 718, Stock Compensation.

During the nine months ended October 3, 2020 and pursuant to the 2017 Incentive Plan, in lieu of cash payments of director fees, the Company awarded to certain directors 9,448 shares of common stock. During the nine months ended October 3, 2020, the Company awarded 22,850 restricted stock units to directors, 113,669 restricted stock units and 35,000 shares of restricted stock to employees. The restricted stock units awarded to directors time vest over two years (one-half one year from grant date and one-half two years from grant date) provided that the director is still a director of the Company at the vest date. Director restricted stock units are subject to forfeiture, except for termination of services as a result of retirement, death or disability, if on the vesting date the director no longer holds a position with the Company. All of the 2020 restricted stock units awarded to employees time vest over three years (one-third one year from grant, one-third two years from grant and one-third three years from grant) provided that the employee is still employed by the Company on the vesting date, and 18,268 of such restricted stock units are also subject to performance conditions. The 35,000 shares of restricted stock vest over three years (40% one year from grant, 30% two years from grant and 30% three years from grant) provided that the employee is still employed by the Company on the vesting date.

For the three and nine months ended October 3, 2020, including expense associated with issuing certain directors stock in lieu of cash for certain director fees, the Company recognized stock based compensation expense of $263 thousand and $853 thousand, respectively compared to stock based compensation expense of $68 thousand and $511 thousand for the same periods in the prior year. At October 3, 2020 and October 5, 2019, respectively, there was $1.2 million and $0.8 million in unrecognized stock-based compensation expense related to non-vested stock awards.

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Segment Information

9 Months Ended

Oct. 03, 2020

Segment Information

Segment Information

Note F – Segment Information

	For the Three Months
	Ended October 3, 2020
In thousands	Sporting Goods		Corp.		Total
Revenues from external customers	$	78,069	$	—	$	78,069
Operating income (loss)		13,177		(362)		12,815
Net income		9,554		632		10,186

	As of and for the Nine Months
	Ended October 3, 2020
In thousands	Sporting Goods		Corp.		Total
Revenues from external customers	$	198,882	$	—	$	198,882
Operating income (loss)		27,640		(1,529)		26,111
Net income		20,017		830		20,847
Total assets	$	190,309	$	8,407	$	198,716

	For the Three Months
	Ended October 5, 2019
In thousands	Sporting Goods		Corp.		Total
Revenues from external customers	$	45,756	$	—	$	45,756
Operating income (loss)		3,223		(324)		2,899
Net income		2,269		271		2,540

	As of and for the Nine Months
	Ended October 5, 2019
In thousands	Sporting Goods		Corp.		Total
Revenues from external customers	$	133,497	$	—	$	133,497
Operating income (loss)		7,001		(1,237)		5,764
Net income (loss)		4,871		(188)		4,683
Total assets	$	148,664	$	7,352	$	156,016

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Dividend Payment

9 Months Ended

Oct. 03, 2020

Dividend Payment

Dividend Payment

Note G – Dividend Payment

On September 21, 2020, the Company paid a quarterly dividend of $0.14 per common share to all shareholders of record on September 14, 2020. The total amount of the dividend was approximately $2.0 million and was charged against retained earnings.

On June 8, 2020, the Company paid a quarterly dividend of $0.125 per common share to all shareholders of record on June 1, 2020. The total amount of the dividend was approximately $1.7 million and was charged against retained earnings.

On March 16, 2020, the Company paid a quarterly dividend of $0.125 per common share to all shareholders of record on March 9, 2020. The total amount of the dividend was approximately $1.8 million and was charged against retained earnings.

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Earnings Per Share

9 Months Ended

Oct. 03, 2020

Earnings Per Share

Earnings Per Share

Note H – Earnings Per Share

The shares used in computation of the Company’s basic and diluted earnings per common share are as follows:

	Three Months Ended		Nine Months Ended
	October 3,	October 5,	October 3,	October 5,
In thousands	2020	2019	2020	2019
Weighted average common shares outstanding	14,128	14,440	14,117	14,455
Dilutive effect of stock options and restricted stock units	137	28	105	30
Weighted average common shares outstanding, assuming dilution	14,265	14,468	14,222	14,485

Stock options that are anti-dilutive as to earnings per share and unvested restricted stock units which have a market condition for vesting that has not been achieved are ignored in the computation of dilutive earnings per share. The number of stock options and restricted stock units that were excluded in 2020 and 2019 were 57,569 and 80,950, respectively.

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New Accounting Standards and Changes in Accounting Principles

9 Months Ended

Oct. 03, 2020

New Accounting Standards and Changes in Accounting Principles

New Accounting Standards and Changes in Accounting Principles

Note I – New Accounting Standards and Changes in Accounting Principles

With the exception of that discussed below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three and nine month periods ended October 3, 2020, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 28, 2019, that are of significance, or potential significance to the Company.

In January 2017, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU) 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The amendments in this update eliminate Step 2 from the goodwill impairment test. The annual, or interim, goodwill impairment test is performed by comparing the fair value of a reporting unit with its carrying amount. An impairment charge should be recognized for the amount by which the carrying amount exceeds the reporting unit's fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. In addition, income tax effects from any tax deductible goodwill on the carrying amount of the reporting unit should be considered when measuring the goodwill impairment loss, if applicable.

The Company adopted this standard on December 29, 2019. The adoption of this standard did not have an impact to the financial statements of the Company.

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Revenue from Contracts with Customers

9 Months Ended

Oct. 03, 2020

Revenue from Contracts with Customers

Revenue from Contracts with Customers

Note J – Revenue from Contracts with Customers

Revenue Recognition – Effective December 31, 2017, we adopted ASC 606. The adoption of this standard did not impact the timing of revenue recognition for customer sales. Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our goods at a point in time based on shipping terms and transfer of title. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Shipping and handling fees charged to customers are reported within revenue.

Gross-to-net sales adjustments – We recognize revenue net of various sales adjustments to arrive at net sales as reported on the statement of operations. These adjustments are referred to as gross-to-net sales adjustments and primarily fall into one of three categories; returns, warranties and customer allowances.

Returns – The Company records an accrued liability and reduction in sales for estimated product returns based upon historical experience. An accrued liability and reduction in sales is also recorded for approved return authorizations that have been communicated by the customer.

Warranties – Limited warranties are provided on certain products for varying periods. We record an accrued liability and reduction in sales for estimated future warranty claims based upon historical experience and management’s estimate of the level of future claims. Changes in the estimated amounts recognized in prior years are recorded as an adjustment to the accrued liability and sales in the current year.

Customer Allowances – Customer allowances are common practice in the industries in which the Company operates. These agreements are typically in the form of advertising subsidies, volume rebates and catalog allowances and are accounted for as a reduction to gross sales. The Company reviews such allowances on an ongoing basis and accruals are adjusted, if necessary, as additional information becomes available.

Disaggregation of Revenue – We generate revenue from the sale of widely recognized sporting goods brands in basketball goals, archery, indoor and outdoor game recreation and fitness products. These products are sold through multiple sales channels that include; mass merchants, specialty dealers, key on-line retailers (“E-commerce”) and international. The following table depicts the disaggregation of revenue according to sales channel:

	Three Months Ended				Nine Months Ended
	October 3,		October 5,		October 3,		October 5,
All Amounts in Thousands	2020		2019		2020		2019
Gross Sales by Channel:
Mass Merchants	$	36,234	$	20,757	$	77,418	$	51,025
Specialty Dealers		21,741		11,826		57,666		41,590
E-commerce		25,172		15,712		78,242		50,452
International		2,637		1,880		6,129		5,228
Other		598		637		1,669		2,079
Total Gross Sales		86,382		50,812		221,124		150,374
Less: Gross-to-Net Sales Adjustments
Returns		2,117		1,473		5,538		4,353
Warranties		376		360		1,152		1,092
Customer Allowances		5,820		3,223		15,552		11,432
Total Gross-to-Net Sales Adjustments		8,313		5,056		22,242		16,877
Total Net Sales	$	78,069	$	45,756	$	198,882	$	133,497

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Leases

9 Months Ended

Oct. 03, 2020

Leases

Leases

Note K – Leases

We have operating leases for office, manufacturing and distribution facilities as well as for certain equipment. Our leases have remaining lease terms of 1 year to 5 years. As of October 3, 2020, the Company has not entered into any lease arrangements classified as a finance lease.

We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (“ROU”) assets, current operating lease liabilities and operating lease liabilities on our consolidated balance sheet. The Company has elected an accounting policy to not recognize short-term leases (one year or less) on the balance sheet. The Company also elected the package of practical expedients which applies to leases that commenced before the adoption date. By electing the package of practical expedients, the Company did not need to reassess the following; whether any existing contracts are or contain leases, the lease classification for any existing leases and initial direct costs for any existing leases.

ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. When the implicit rate of the lease is not provided or cannot be determined, we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise those options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Components of lease expense and other information as follows:

	Three Months Ended				Nine Months Ended
	October 3,		October 5,		October 3,		October 5,
All Amounts in Thousands	2020		2019		2020		2019
Lease Expense
Operating Lease Cost	$	197	$	164	$	610	$	608
Short-term Lease Cost		137		149		411		348
Variable Lease Cost		52		47		169		188
Total Operating Lease Cost		386	$	360	$	1,190	$	1,144
Operating Lease - Operating Cash Flows	$	182	$	156	$	557	$	552
New ROU Assets - Operating Leases	$	56	$	108	$	744	$	833

Other information about lease amounts recognized in our consolidated financial statements is summarized as follows:

	Nine Months Ended
	October 3,		October 5,
All Amounts in Thousands	2020		2019
Weighted Average Remaining Lease Term – Operating Leases	2.40	years	2.03	years
Weighted Average Discount Rate – Operating Leases	5.00	%	5.00	%

Future minimum lease payments under non-cancellable leases as of October 3, 2020 were as follows:

All Amounts in Thousands
Year 1	$	738
Year 2		330
Year 3		211
Year 4		53
Year 5		27
Thereafter		1
Total future minimum lease payments		1,360
Less imputed interest		(76)
Total	$	1,284
Reported as of October 3, 2020
Current operating lease liabilities		693
Long-term operating lease liabilities		591
Total	$	1,284

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Commitments and Contingencies

9 Months Ended

Oct. 03, 2020

Commitments and Contingencies

Commitments and Contingencies

Note L – Commitments and Contingencies

The Company is involved in litigation arising in the normal course of business. The Company does not believe that the disposition or ultimate resolution of existing claims or lawsuits will have a material adverse effect on the business or financial condition of the Company.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Oct. 03, 2020

Summary of Significant Accounting Policies

Presentation of Consolidated Condensed Financial Statements

Presentation of Consolidated Condensed Financial Statements – The significant accounting policies followed by the Company and its wholly owned subsidiaries for interim financial reporting are consistent with the accounting policies followed for its annual financial reporting. All adjustments that are of a normal recurring nature and are in the opinion of management necessary for a fair statement of the results for the periods reported have been included in the accompanying consolidated condensed financial statements. The consolidated condensed balance sheet of the Company as of December 28, 2019 has been derived from the audited consolidated balance sheet of the Company as of that date. Certain information and note disclosures normally included in the Company’s annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted. These consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Form 10-K annual report for 2019 filed with the Securities and Exchange Commission.

Reclassifications

Reclassifications - Certain reclassifications have been made to prior year financial statements to conform to the current year financial statement presentation. These reclassifications had no effect on net earnings.

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Inventories (Tables)

9 Months Ended

Oct. 03, 2020

Inventories

Schedule of Inventories

	October 3,		December 28,		October 5,
In thousands	2020		2019		2019
Raw materials	$	8,446	$	3,186	$	3,860
Work in progress		4,217		2,177		2,410
Finished goods		51,075		36,906		42,154
	$	63,738	$	42,269	$	48,424

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Fair Values of Financial Instruments (Tables)

9 Months Ended

Oct. 03, 2020

Fair Values of Financial Instruments

Schedule of estimated fair values of the Company's financial instruments

The following table presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall in accordance with FASB ASC 825 at October 3, 2020, December 28, 2019 and October 5, 2019.

			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets		Significant Other		Unobservable
October 3, 2020	Carrying		for Identical		Observable Inputs		Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	6,811	$	6,811	$	—	$	—

			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets		Significant Other		Unobservable
December 28, 2019	Carrying		for Identical		Observable Inputs		Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	5,882	$	5,882	$	—	$	—

			Fair Value Measurements Using
			Quoted Prices in				Significant
			Active Markets		Significant Other		Unobservable
October 5, 2019	Carrying		for Identical		Observable Inputs		Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	5,226	$	5,226	$	—	$	—
Financial liabilities
Long-term debt	$	5,221	$	—	$	5,221	$	—

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Segment Information (Tables)

9 Months Ended

Oct. 03, 2020

Segment Information

Schedule of certain operating segment information

	For the Three Months
	Ended October 3, 2020
In thousands	Sporting Goods		Corp.		Total
Revenues from external customers	$	78,069	$	—	$	78,069
Operating income (loss)		13,177		(362)		12,815
Net income		9,554		632		10,186

	As of and for the Nine Months
	Ended October 3, 2020
In thousands	Sporting Goods		Corp.		Total
Revenues from external customers	$	198,882	$	—	$	198,882
Operating income (loss)		27,640		(1,529)		26,111
Net income		20,017		830		20,847
Total assets	$	190,309	$	8,407	$	198,716

	For the Three Months
	Ended October 5, 2019
In thousands	Sporting Goods		Corp.		Total
Revenues from external customers	$	45,756	$	—	$	45,756
Operating income (loss)		3,223		(324)		2,899
Net income		2,269		271		2,540

	As of and for the Nine Months
	Ended October 5, 2019
In thousands	Sporting Goods		Corp.		Total
Revenues from external customers	$	133,497	$	—	$	133,497
Operating income (loss)		7,001		(1,237)		5,764
Net income (loss)		4,871		(188)		4,683
Total assets	$	148,664	$	7,352	$	156,016

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Earnings Per Share (Tables)

9 Months Ended

Oct. 03, 2020

Earnings Per Share

Schedule of weighted average number of shares

The shares used in computation of the Company’s basic and diluted earnings per common share are as follows:

	Three Months Ended		Nine Months Ended
	October 3,	October 5,	October 3,	October 5,
In thousands	2020	2019	2020	2019
Weighted average common shares outstanding	14,128	14,440	14,117	14,455
Dilutive effect of stock options and restricted stock units	137	28	105	30
Weighted average common shares outstanding, assuming dilution	14,265	14,468	14,222	14,485

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Revenue from Contracts with Customers (Tables)

9 Months Ended

Oct. 03, 2020

Revenue from Contracts with Customers

Schedule of disaggregation of revenue

	Three Months Ended				Nine Months Ended
	October 3,		October 5,		October 3,		October 5,
All Amounts in Thousands	2020		2019		2020		2019
Gross Sales by Channel:
Mass Merchants	$	36,234	$	20,757	$	77,418	$	51,025
Specialty Dealers		21,741		11,826		57,666		41,590
E-commerce		25,172		15,712		78,242		50,452
International		2,637		1,880		6,129		5,228
Other		598		637		1,669		2,079
Total Gross Sales		86,382		50,812		221,124		150,374
Less: Gross-to-Net Sales Adjustments
Returns		2,117		1,473		5,538		4,353
Warranties		376		360		1,152		1,092
Customer Allowances		5,820		3,223		15,552		11,432
Total Gross-to-Net Sales Adjustments		8,313		5,056		22,242		16,877
Total Net Sales	$	78,069	$	45,756	$	198,882	$	133,497

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Leases (Tables)

9 Months Ended

Oct. 03, 2020

Leases

Schedule of lease, cost

	Three Months Ended				Nine Months Ended
	October 3,		October 5,		October 3,		October 5,
All Amounts in Thousands	2020		2019		2020		2019
Lease Expense
Operating Lease Cost	$	197	$	164	$	610	$	608
Short-term Lease Cost		137		149		411		348
Variable Lease Cost		52		47		169		188
Total Operating Lease Cost		386	$	360	$	1,190	$	1,144
Operating Lease - Operating Cash Flows	$	182	$	156	$	557	$	552
New ROU Assets - Operating Leases	$	56	$	108	$	744	$	833

Other information about lease amounts recognized in our consolidated financial statements is summarized as follows:

	Nine Months Ended
	October 3,		October 5,
All Amounts in Thousands	2020		2019
Weighted Average Remaining Lease Term – Operating Leases	2.40	years	2.03	years
Weighted Average Discount Rate – Operating Leases	5.00	%	5.00	%

Schedule of future minimum rental payments for operating leases

Future minimum lease payments under non-cancellable leases as of October 3, 2020 were as follows:

All Amounts in Thousands
Year 1	$	738
Year 2		330
Year 3		211
Year 4		53
Year 5		27
Thereafter		1
Total future minimum lease payments		1,360
Less imputed interest		(76)
Total	$	1,284
Reported as of October 3, 2020
Current operating lease liabilities		693
Long-term operating lease liabilities		591
Total	$	1,284

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Inventories (Details) - USD ($) $ in Thousands	Oct. 03, 2020	Dec. 28, 2019	Oct. 05, 2019
Inventories
Raw materials	$ 8,446	$ 3,186	$ 3,860
Work in progress	4,217	2,177	2,410
Finished goods	51,075	36,906	42,154
Inventories	$ 63,738	$ 42,269	$ 48,424

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Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Oct. 03, 2020	Dec. 28, 2019	Oct. 05, 2019
Financial assets, Carrying Amount
Cash and cash equivalents	$ 6,811	$ 5,882	$ 5,226
Financial liabilities, Fair Value
Long-term debt, Fair Value			5,221
Fair Value, Inputs, Level 1 [Member]
Financial assets, Carrying Amount
Cash and cash equivalents	6,811	5,882	5,226
Fair Value, Inputs, Level 2 [Member]
Financial assets, Carrying Amount
Cash and cash equivalents	0	0	0
Financial liabilities, Fair Value
Long-term debt, Fair Value			5,221
Fair Value, Inputs, Level 3 [Member]
Financial assets, Carrying Amount
Cash and cash equivalents	$ 0	$ 0	$ 0

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Stock Compensation (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2020	Oct. 05, 2019	Oct. 03, 2020	Oct. 05, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense	$ 263	$ 68	$ 853	$ 511
Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issued in lieu of cash payments of director fees			9,448
Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards subject to performance conditions			18,268
Restricted Stock Units (RSUs) [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			22,850
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			2 years
Restricted Stock Units (RSUs) [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross			113,669
Nonvested Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee and Non Employee Service Share-based Compensation Nonvested Awards Total Compensation Cost Not Yet Recognized	$ 1,200	$ 800	$ 1,200	$ 800
Restricted Stock | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Awards granted			35,000
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period			3 years
One year from grant | Restricted Stock Units (RSUs) [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			0.50%
One year from grant | Restricted Stock Units (RSUs) [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			0.30%
One year from grant | Restricted Stock | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			40.00%
Two years from grant | Restricted Stock Units (RSUs) [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			0.50%
Two years from grant | Restricted Stock Units (RSUs) [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			0.30%
Two years from grant | Restricted Stock | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			30.00%
Three years from grant | Restricted Stock Units (RSUs) [Member] | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			0.30%
Three years from grant | Restricted Stock | Employees [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting percentage			30.00%

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Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2020	Oct. 05, 2019	Oct. 03, 2020	Oct. 05, 2019	Dec. 28, 2019
Segment Reporting Information [Line Items]
Revenues from external customers	$ 78,069	$ 45,756	$ 198,882	$ 133,497
Operating income (loss)	12,815	2,899	26,111	5,764
Net income	10,186	2,540	20,847	4,683
Total assets	198,716	156,016	198,716	156,016	$ 148,779
Sporting Goods [Member]
Segment Reporting Information [Line Items]
Revenues from external customers	78,069	45,756	198,882	133,497
Operating income (loss)	13,177	3,223	27,640	7,001
Net income	9,554	2,269	20,017	4,871
Total assets	190,309	148,664	190,309	148,664
Corporate Segment [Member]
Segment Reporting Information [Line Items]
Revenues from external customers			0	0
Operating income (loss)	(362)	(324)	(1,529)	(1,237)
Net income	632	271	830	(188)
Total assets	$ 8,407	$ 7,352	$ 8,407	$ 7,352

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Dividend Payment (Details) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended		9 Months Ended
	Sep. 21, 2020	Jun. 08, 2020	Mar. 16, 2020	Oct. 03, 2020	Oct. 05, 2019	Oct. 03, 2020	Oct. 05, 2019
Dividend Payment
Common Stock, Dividends, Per Share, Cash Paid	$ 0.14	$ 0.125	$ 0.125
Dividends, Common Stock, Cash	$ 2,000	$ 1,700	$ 1,800	$ 1,984	$ 1,805	$ 5,515	$ 5,423

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Earnings Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Oct. 03, 2020	Oct. 05, 2019	Oct. 03, 2020	Oct. 05, 2019
Earnings Per Share
Weighted average common shares outstanding	14,128,000	14,440,000	14,117,000	14,455,000
Dilutive effect of stock options and restricted stock units	137,000	28,000	105,000	30,000
Weighted average common shares outstanding, assuming dilution	14,265,000	14,468,000	14,222,000	14,485,000
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount			57,569	80,950

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Earnings Per Share - Additional Information (Details) - shares	9 Months Ended
	Oct. 03, 2020	Oct. 05, 2019
Earnings Per Share
Number of anti-dilutive stock options and unvested restricted stock units	57,569	80,950

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Revenue from Contracts with Customers (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2020	Oct. 05, 2019	Oct. 03, 2020	Oct. 05, 2019
Sales Revenues Goods Net [Abstract]
Total Gross Sales	$ 86,382	$ 50,812	$ 221,124	$ 150,374
Sales Returns And Allowance Goods [Abstract]
Returns	2,117	1,473	5,538	4,353
Warranties	376	360	1,152	1,092
Customer Allowances	5,820	3,223	15,552	11,432
Total Gross-to-Net Sales Adjustments	8,313	5,056	22,242	16,877
Total Net Sales	78,069	45,756	198,882	133,497
Mass Merchants [Member]
Sales Revenues Goods Net [Abstract]
Total Gross Sales	36,234	20,757	77,418	51,025
Specialty Dealers [Member]
Sales Revenues Goods Net [Abstract]
Total Gross Sales	21,741	11,826	57,666	41,590
E-commerce [Member]
Sales Revenues Goods Net [Abstract]
Total Gross Sales	25,172	15,712	78,242	50,452
International [Member]
Sales Revenues Goods Net [Abstract]
Total Gross Sales	2,637	1,880	6,129	5,228
Other [Member]
Sales Revenues Goods Net [Abstract]
Total Gross Sales	$ 598	$ 637	$ 1,669	$ 2,079

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Leases (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2020	Oct. 05, 2019	Oct. 03, 2020	Oct. 05, 2019
Lease Expense
Operating Lease Cost	$ 197	$ 164	$ 610	$ 608
Short-term Lease Cost	137	149	411	348
Variable Lease Cost	52	47	169	188
Total Operating Lease Cost	386	360	1,190	1,144
Operating Lease - Operating Cash Flows	182	156	557	552
New ROU Assets - Operating Leases	$ 56	$ 108	$ 744	$ 833
Weighted Average Remaining Lease Term - Operating Leases	2 years 4 months 24 days	2 years 10 days	2 years 4 months 24 days	2 years 10 days
Weighted Average Discount Rate - Operating Leases	5.00%	5.00%	5.00%	5.00%

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Leases - Future minimum lease payments (Details) - USD ($) $ in Thousands	Oct. 03, 2020	Dec. 28, 2019	Oct. 05, 2019
Leases
Year 1	$ 738
Year 2	330
Year 3	211
Year 4	53
Year 5	27
Thereafter	1
Total future minimum lease payments	1,360
Less imputed interest	(76)
Total	1,284
Current operating lease liabilities	693	$ 621	$ 689
Long-term operating lease liabilities	591	$ 475	$ 575
Total	$ 1,284

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Leases - Additional Information (Details)	9 Months Ended
	Oct. 03, 2020
Maximum [Member]
Operating Lease Remaining Lease Term	5 years
Minimum [Member]
Operating Lease Remaining Lease Term	1 year