Note D – Equity Interest Investments

The Company has a 50% interest in a joint venture, Stiga Sports AB (Stiga). The joint venture is accounted for under the equity method of accounting. Stiga, located in Sweden, is a global sporting goods company producing table tennis equipment and game products. Financial information for Stiga reflected in the table below has been translated from local currency to U.S. dollars using exchange rates in effect at the respective period-end for balance sheet amounts, and using average exchange rates for statement of operations amounts. Certain differences exist between U.S. GAAP and local GAAP in Sweden, and the impact of these differences is not reflected in the summarized information reflected in the table below. The most significant difference relates to the accounting for goodwill for Stiga which is amortized over eight years in Sweden but is not amortized for U.S. GAAP reporting purposes. The effect on Stiga’s net assets resulting from the amortization of goodwill for the periods ended July 13, 2013 and July 14, 2012 are addbacks to Stiga’s consolidated financial information of $12.0 million and $9.8 million, respectively. These net differences are comprised of cumulative goodwill adjustments of $16.8 million offset by the related cumulative tax effect of $4.8 million as of July 13, 2013 and cumulative goodwill adjustments of $13.7 million offset by the related cumulative tax effect of $3.9 million as of July 14, 2012. The statement of operations impact of these goodwill and tax adjustments and other individually insignificant U.S. GAAP adjustments for the periods ended July 13, 2013, and July 14, 2012 are to increase Stiga’s net income by approximately $0.8 million and $1.2 million, respectively. The Company’s 50% portion of net income for Stiga for the periods ended July 13, 2013 and July 14, 2012 was $0.4 million and $0.5 million, respectively, and is included in other income (expense) on the Company’s statements of operations.

In addition, Escalade has a 50% interest in two joint ventures, Escalade International, Ltd. in the United Kingdom, and Neoteric Industries Inc. in Taiwan. Escalade International Ltd. is a sporting goods wholesaler, specializing in fitness equipment. During the second quarter of 2013, the decision was made to cease operations and liquidate Escalade International, Ltd. Losses incurred during the period include shutdown costs. As a result, the Company’s 50% portion of net loss for Escalade International, Ltd. for the periods ended July 13, 2013 and July 14, 2012 was ($458) thousand and ($88) thousand respectively, and is included in other income (expense) on the Company’s statements of operations. The losses incurred during 2013 reduce to zero the Company’s investment in Escalade International, Ltd. The income and assets of Neoteric have no impact on the Company’s financial reporting. Additional information regarding these entities is considered immaterial and has not been included in the totals listed below.

Summarized financial information for Stiga Sports AB balance sheets as of July 13, 2013, December 29, 2012, and July 14, 2012 and statements of operations for the periods ended July 13, 2013 and July 14, 2012 is as follows:

In thousands	July 13, 2013		December 29, 2012		July 14, 2012

Current assets	$	23,118	$	28,538	$	17,926
Non-current assets		9,062		8,065		8,076
Total assets		32,180		36,603		26,002

Current liabilities		7,030		10,850		5,580
Non-current liabilities		5,696		4,487		5,266
Total liabilities		12,726		15,337		10,846

Net assets	$	19,454	$	21,266	$	15,156

	Three Months Ended				Six Months Ended
	July 13, 2013		July 14, 2012		July 13, 2013		July 14, 2012

Net sales	$	9,929	$	8,628	$	14,765	$	12,775
Gross profit		4,892		4,245		7,455		6,412
Net income (loss)		(48)		(123)		4		(220)