10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended October 3, 2015 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 (State of incorporation) 13-2739290 (I.R.S. EIN)

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

812-467-4449

(Registrant's Telephone Number)

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 x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files). 

Yes x No ¨

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

Large accelerated filer ¨	Accelerated filer x
Non-accelerated filer ¨    (Do not check if a smaller reporting company)	Smaller reporting company ¨

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

Yes ¨ No x

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 27, 2015
Common, no par value	14,129,986

INDEX

		Page No.
Part I.	Financial Information:
Item 1 -	Financial Statements:
	Consolidated Condensed Balance Sheets as of October 3, 2015, December 27, 2014, and October 4, 2014	3
	Consolidated Condensed Statements of Operations for the Three Months and Nine Months Ended October 3, 2015 and October 4, 2014	4
	Consolidated Condensed Statements of Comprehensive Income for the Three Months and Nine Months Ended October 3, 2015 and October 4, 2014	5
	Consolidated Condensed Statements of Cash Flows for the Nine Months Ended October 3, 2015 and October 4, 2014	6
	Notes to Consolidated Condensed Financial Statements	7
Item 2 -	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3 -	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4 -	Controls and Procedures	16
Part II.	Other Information
Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	17
Item 6 -	Exhibits	18
	Signature	18

2

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

ESCALADE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

All Amounts in Thousands Except Share Information	October 3, 2015			December 27, 2014			October 4, 2014
	(Unaudited)			(Audited)			(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	2,701		$	3,232		$	798
Time deposits		—			1,450			2,450
Receivables, less allowance of $885; $900; and $844; respectively		31,407			32,150			30,214
Inventories		40,337			23,775			33,182
Prepaid expenses		2,134			1,622			1,699
Deferred income tax benefit		949			925			2,302
Prepaid income tax		1,699			5,697			7,966
TOTAL CURRENT ASSETS		79,227			68,851			78,611
Property, plant and equipment, net		13,848			11,596			10,858
Intangible assets, net		17,517			13,465			9,145
Goodwill		20,142			14,875			13,242
Investments		18,799			18,949			18,782
Other assets		5			145			145
TOTAL ASSETS	$	149,538		$	127,881		$	130,783
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable	$	27,963		$	16,200		$	15,631
Current portion of long-term debt		1,810			1,586			1,586
Trade accounts payable		6,630			1,853			5,949
Accrued liabilities		12,430			12,107			11,003
TOTAL CURRENT LIABILITIES		48,833			31,746			34,169
Other Liabilities:
Long-term debt		1,750			3,360			3,360
Deferred income tax liability		5,031			2,996			5,456
TOTAL LIABILITIES		55,614			38,102			42,985
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 – 14,125,935; 13,998,090; and 13,950,874; shares respectively		14,126			13,998			13,951
Retained earnings		83,064			77,745			74,892
Accumulated other comprehensive loss		(3,266	)		(1,964	)		(1,045	)
TOTAL STOCKHOLDERS' EQUITY		93,924			89,779			87,798
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	149,538		$	127,881		$	130,783

See notes to Consolidated Condensed Financial Statements.

3

ESCALADE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended						Nine Months Ended
All Amounts in Thousands Except Per Share Data	October 3, 2015			October 4, 2014			October 3, 2015			October 4, 2014
Net sales	$	34,584		$	31,599		$	111,798		$	97,332
Costs, Expenses and Other Income
Cost of products sold		25,156			21,945			78,336			67,102
Selling, administrative and general expenses		6,905			4,871			21,018			16,865
Amortization		650			567			2,127			1,894
Operating Income		1,873			4,216			10,317			11,471
Interest expense		108			133			340			324
Other expense (income)		(1,108	)		(1,914	)		(2,356	)		(2,315	)
Income Before Income Taxes from Continuing Operations		2,873			5,997			12,333			13,462
Provision for Income Taxes from Continuing Operations		845			2,160			3,586			4,594
Net Income from Continuing Operations		2,028			3,837			8,747			8,868
Discontinued Operations
Loss from operations		—			(379	)		—			(395	)
Loss on classification as held for sale		—			—			—			(12,945	)
Gain on disposal (includes $2,565 of accumulated other comprehensive income reclassification from foreign currency translation adjustment)		—			5,591			—			6,138
Provision (benefit) for income taxes		—			(4,572	)		—			(6,121	)
Net Income (Loss) from Discontinued Operations		—			9,784			—			(1,081	)
Net Income	$	2,028		$	13,621		$	8,747		$	7,787
Basic Earnings Per Share Data:
Income from continuing operations	$	0.14		$	0.28		$	0.62		$	0.64
Income (Loss) from discontinued operations		—			0.70			—			(0.08	)
Net Income	$	0.14		$	0.98		$	0.62		$	0.56
Diluted Earnings Per Share Data:
Income from continuing operations	$	0.14		$	0.27		$	0.61		$	0.63
Income (Loss) from discontinued operations		—			0.69			—			(0.08	)
Net Income	$	0.14		$	0.96		$	0.61		$	0.55
Dividends declared	$	0.11		$	0.10		$	0.32		$	0.28

See notes to Consolidated Condensed Financial Statements.

4

ESCALADE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

	Three Months Ended					Nine Months Ended
All Amounts in Thousands Except Share Information	October 3, 2015		October 4, 2014			October 3, 2015			October 4, 2014
Net Income	$	2,028	$	13,621		$	8,747		$	7,787
Foreign currency translation adjustment before reclassifications		168		(2,661	)		(1,302	)		(3,399	)
Amounts reclassified from comprehensive income due to divestiture		—		(2,565	)		—			(2,565	)
Comprehensive Income	$	2,196	$	8,395		$	7,445		$	1,823

All amounts are net of tax

See notes to Consolidated Condensed Financial Statements.

5

ESCALADE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Nine Months Ended
All Amounts in Thousands	October 3, 2015			October 4, 2014
Operating Activities:
Net income	$	8,747		$	7,787
Depreciation and amortization		3,812			3,331
Loss (gain) on disposal of property and equipment		1			(1	)
Stock-based compensation		440			447
Additional discontinued operations activities		—			2,722
Adjustments necessary to reconcile net income (loss) to net cash provided by operating activities		(8,147	)		(5,198	)
Net cash provided by operating activities		4,853			9,088
Investing Activities:
Purchase of property and equipment		(3,900	)		(1,680	)
Purchase of short-term time deposits		—			(2,000	)
Acquisitions		(10,300	)		(162	)
Proceeds from sale of property and equipment		—			17
Dividends received from equity method investments		928			—
Proceeds from disposal of short-term time deposits		1,450			1,250
Discontinued operations activities		—			5,700
Net cash provided (used) by investing activities		(11,822	)		3,125
Financing Activities:
Net increase (decrease) in notes payable		11,764			(6,069	)
Principal payments on long-term debt		(1,586	)		(1,562	)
Proceeds from exercise of stock options		733			1,354
Cash dividends paid		(4,511	)		(3,894	)
Director stock compensation		38			114
Net cash provided (used) by financing activities		6,438			(10,057	)
Effect of exchange rate changes on cash		—			(3,704	)
Net decrease in cash and cash equivalents		(531	)		(1,548	)
Cash and cash equivalents, beginning of period (includes zero and $1,255 respectively of cash reported as assets held for sale)		3,232			2,346
Cash and cash equivalents, end of period	$	2,701		$	798
Supplemental Cash Flows Information
Dividends payable	$	3		$	45
Non-Cash Transactions
Note payable for deferred purchase price obligation	$	200		$	—

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 27, 2014 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 2014 filed with the Securities and Exchange Commission.

Note B - Seasonal Aspects

The results of operations for the three and nine month periods ended October 3, 2015 and October 4, 2014 are not necessarily indicative of the results to be expected for the full year.

Note C - Inventories

In thousands	October 3, 2015		December 27, 2014		October 4, 2014
Raw materials	$	4,943	$	3,950	$	6,125
Work in progress		5,168		3,967		5,269
Finished goods		30,226		15,858		21,788
	$	40,337	$	23,775	$	33,182

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 goodwill for Stiga was fully amortized as of December 27, 2014. The effect on Stiga’s net assets resulting from the cumulative amortization of goodwill for the periods ended October 3, 2015 and October 4, 2014 are addbacks to Stiga’s consolidated net assets of $10.7 million and $12.4 million, respectively. These net differences are comprised of cumulative goodwill adjustments of $14.9 million offset by the related cumulative tax effect of $4.2 million as of October 3, 2015 and cumulative goodwill adjustments of $17.3 million offset by the related cumulative tax effect of $4.9 million as of October 4, 2014. The Company’s 50% portion of the statement of operations impact of these goodwill and tax adjustments and other individually insignificant U.S. GAAP adjustments for the nine month periods ended October 3, 2015, and October 4, 2014 are to increase Stiga’s net income by approximately zero and $0.3 million, respectively. The Company’s 50% portion of net income for Stiga, included in other income (expense) on the Company’s statements of operations, for the periods ended October 3, 2015 and October 4, 2014 is as follows:

	Three Months Ended				Nine Months Ended
In thousands	October 3, 2015		October 4, 2014		October 3, 2015		October 4, 2014
Other income	$	1,069	$	1,786	$	2,080	$	2,169

7

Summarized financial information for Stiga Sports AB balance sheets as of October 3, 2015, December 27, 2014, and October 4, 2014 and statements of operations for the three month and nine month periods ended October 3, 2015 and October 4, 2014 is as follows:

In thousands	October 3, 2015		December 27, 2014		October 4, 2014
Current assets	$	31,044	$	30,539	$	33,046
Non-current assets		9,533		8,082		8,064
Total assets		40,577		38,621		41,110
Current liabilities		7,777		7,669		10,921
Non-current liabilities		5,736		4,229		4,370
Total liabilities		13,513		11,898		15,291
Net assets	$	27,064	$	26,723	$	25,819

	Three Months Ended				Nine Months Ended
In thousands	October 3, 2015		October 4, 2014		October 3, 2015		October 4, 2014
Net sales	$	12,846	$	17,206	$	30,161	$	33,944
Gross profit		6,304		8,308		14,899		16,654
Net income		2,138		3,581		3,346		3,969

Note E – Income Taxes

The provision for income taxes was computed based on financial statement income. In accordance with FASB Accounting Standards Codification (ASC) 740, the Company has recorded the following changes in uncertain tax positions:

	Nine Months Ended
In thousands	October 3, 2015		October 4, 2014
Beginning balance	$	—	$	—
Additions for current year tax positions		—		751
Additions for prior year tax positions		—		—
Settlements		—		—
Reductions or settlements		—		(751	)
Reductions for prior year tax positions		—		—
Ending balance	$	—	$	—

Note F – 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 and Time Deposits

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

8

Notes Payable and Long-term Debt

Fair values of notes payable and long-term debt approximates the carrying value and 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, 2015, December 27, 2014 and October 4, 2014.

			Fair Value Measurements Using
October 3, 2015 In thousands	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	2,701	$	2,701	$	—	$	—
Time deposits	$	—	$	—	$	—	$	—
Financial liabilities
Notes payable	$	27,963	$	—	$	27,963	$	—
Current portion of  long-term debt	$	1,810	$	—	$	1,810	$	—
Long-term debt	$	1,750	$	—	$	1,750	$	—

			Fair Value Measurements Using
December 27, 2014 In thousands	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	3,232	$	3,232	$	—	$	—
Time deposits	$	1,450	$	1,450	$	—	$	—
Financial liabilities
Notes payable	$	16,200	$	—	$	16,200	$	—
Current portion of  long-term debt	$	1,586	$	—	$	1,586	$	—
Long-term debt	$	3,360	$	—	$	3,360	$	—

9

			Fair Value Measurements Using
October 4, 2014 In thousands	Carrying Amount		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Financial assets
Cash and cash equivalents	$	798	$	798	$	—	$	—
Time deposits	$	2,450	$	2,450	$	—	$	—
Financial liabilities
Notes payable	$	15,631	$	—	$	15,631	$	—
Current portion of  Long-term debt	$	1,586	$	—	$	1,586	$	—
Long-term debt	$	3,360	$	—	$	3,360	$	—

Note G – 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, 2015 and pursuant to the 2007 Incentive Plan, in lieu of cash payments of director fees, the Company awarded to certain directors 2,311 shares of common stock. In addition, the Company awarded 10,000 restricted stock units to directors and 42,450 restricted stock units 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. The 2015 restricted stock units awarded to employees vest over four years (one-third two years from grant date, one-third three years from grant date and one-third four years from grant date) provided that the employee is still employed by the Company and that the performance criteria related to the market price of the Company’s stock is satisfied. The criteria is for any 30 consecutive trading days on the NASDAQ Stock Market (or such other principal securities exchange on which the Company’s shares of common stock are then traded) during the period beginning on the grant date and ending on the fourth anniversary thereof, the cumulative average Volume Weighted Average Price per share is at least 15% higher than the closing price per share on the grant date plus any incremental dividends paid above the current quarterly dividend rate of $0.10 per share by the Company during such four year period. The performance criteria for the 38,250 restricted stock units awarded to employees in the first quarter of 2015 was satisfied during the second quarter of 2015. The Company utilizes the Monte Carlo technique to determine the fair value of restricted stock units granted for awards with market conditions.

For the three months and nine months ended October 3, 2015, including expense associated with issuing certain directors stock in lieu of cash for certain director fees, the Company recognized stock based compensation expense of $155 thousand and $478 thousand, respectively, compared to stock based compensation expense of $161 thousand and $561 thousand for the same periods in the prior year. At October 3, 2015 and October 4, 2014, respectively, there was $0.8 million and $0.8 million in unrecognized stock-based compensation expense related to non-vested stock awards.

Note H – Discontinued Operations

On October 1, 2014, the Company completed the sale of the Information Security business. The sale of the Information Security business, coupled with the sale of our Print Finishing business on June 30, 2014, represents the Company’s exit from the Information Security and Print Finishing segment. As a result, the Information Security and Print Finishing segment has been classified as discontinued operations for all periods presented and certain assets and liabilities in prior periods are classified as held for sale.

10

The carrying value of these assets was greater than their fair value, less the cost to sell the Information Security business, resulting in an impairment of certain accounts receivables, inventories, long-lived assets, intangible assets and other assets totaling $12.9 million. The impairment charge reduced the carrying value of intangible assets to fair value and the remaining assets to the lower of their carrying amount or fair value less cost to sell. The fair value for these assets was determined by estimating the most likely sale price with a third-party buyer based on market data. The Company does not expect to have any further significant losses to record in the future for these assets. Because of the significance of the unobservable inputs and management’s judgment used in the assets held for sell analysis, these measurements were classified in level three of the valuation hierarchy.

The results of operations presented as discontinued operations are summarized below.

	Three Months Ended					Nine Months Ended
All Amounts in Thousands	October 3, 2015		October 4, 2014			October 3, 2015		October 4, 2014
Net sales	$	—	$	4,957		$	—	$	20,865
Cost of products sold		—		3,530			—		13,812
Selling, administrative and general expenses		—		1,830			—		7,297
Interest expense (income)		—		(24	)		—		138
Other expense		—		—			—		13
Loss Before Income Taxes		—		(379	)		—		(395	)
Discontinued Operations
Loss on classification as held for sale		—		—			—		(12,945	)
Gain on disposal		—		5,591			—		6,138
Benefit for income taxes		—		(4,572	)		—		(6,121	)
Net Income (Loss) from Discontinued Operations	$	—	$	9,784		$	—	$	(1,081	)

Note I - Segment Information

The Information Security and Print Finishing segment has been classified as discontinued operations for all periods presented.

	For the Three Months Ended October 3, 2015
In thousands	Sporting Goods		Discontinued Operations		Corp.			Total
Revenues from external customers	$	34,584	$	—	$	—		$	34,584
Operating income (loss)		2,875		—		(1,002	)		1,873
Net income		1,582		—		446			2,028

	As of and for the Nine Months Ended October 3, 2015
In thousands	Sporting Goods		Discontinued Operations		Corp.			Total
Revenues from external customers	$	111,798	$	—	$	—		$	111,798
Operating income (loss)		13,372		—		(3,055	)		10,317
Net income		8,035		—		712			8,747
Total assets	$	124,423	$	—	$	25,115		$	149,538

11

	For the Three Months Ended October 4, 2014
In thousands	Sporting Goods		Discontinued Operations			Corp.			Total
Revenues from external customers	$	31,599	$	4,957		$	—		$	36,556
Operating income (loss)		5,113		(403	)		(897	)		3,813
Net income		3,103		9,784			734			13,621

	As of and for the Nine Months Ended October 4, 2014
In thousands	Sporting Goods		Discontinued Operations			Corp.			Total
Revenues from external customers	$	97,332	$	20,865		$	—		$	118,197
Operating income (loss)		14,580		(244	)		(3,109	)		11,227
Net income (loss)		8,866		(1,081	)		2			7,787
Total assets	$	97,343	$	—		$	33,440		$	130,783

Note J – Dividend Payment

On September 21, 2015, the company paid a quarterly dividend of $0.11 per common share to all shareholders of record on September 14, 2015. The total amount of the dividend was approximately $1.6 million and was charged against retained earnings.

On June 19, 2015, the company paid a quarterly dividend of $0.11 per common share to all shareholders of record on June 12, 2015. The total amount of the dividend was approximately $1.6 million and was charged against retained earnings.

On March 20, 2015, the Company paid a quarterly dividend of $0.10 per common share to all shareholders of record on March 13, 2015. The total amount of the dividend was approximately $1.4 million and was charged against retained earnings.

Note K - 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
In thousands	October 3, 2015		October 4, 2014		October 3, 2015		October 4, 2014
Weighted average common shares outstanding		14,120		13,922		14,069		13,821
Dilutive effect of stock options and restricted stock units		190		264		188		257
Weighted average common shares outstanding, assuming dilution		14,310		14,186		14,257		14,078

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. No stock options or restricted stock units were excluded in the computation of dilutive earnings per share in 2014. In 2015, there were 4,200 restricted stock units excluded from the computation of dilutive earnings per share.

12

Note L – New Accounting Standards

There have been no recent accounting pronouncements or changes in accounting pronouncements during the nine months ended October 3, 2015, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2014, that are of significance, or potential significance to the Company.

Note M – 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.

Note N – Acquisitions

During the third quarter of 2015, the Company acquired certain assets and liabilities of Onix Sports, Inc. and acquired all of the issued and outstanding shares of capital stock of Goalsetter Systems, Inc. for total consideration of cash and notes of approximately $10.3 million, subject to adjustments for working capital. The Company anticipates that total working capital adjustments will result in $0.6 million of additional consideration to the sellers, of which $0.2 million was paid during the third quarter of 2015.

The consideration paid by the company for these acquisitions is allocated to the assets acquired, net of the liabilities assumed, based upon their estimated fair values as of the date of the acquisition. The excess of the purchase price over the estimated fair value of the assets acquired, net of the estimated fair value of the liabilities assumed, is recorded as goodwill. The Company has not yet finalized the purchase price or its final evaluation of the fair value of certain assets acquired. The primary areas of the purchase price allocation that are not yet finalized relate to the valuation of intangible assets acquired, deferred income taxes and residual goodwill. Any changes during the measurement period may have an impact on the allocation of the purchase price, including values assigned to assets, liabilities and the amount of estimated goodwill and intangible assets represented in the table below.

In thousands
Assets acquired and liabilities assumed:
Accounts receivable	$	801
Inventories		968
Other assets		51
Goodwill		5,267
Intangible assets		6,180
Accounts payable		(259	)
Other liabilities		(73	)
Deferred income tax liability		(2,035	)
	$	10,900

These acquisitions were not and would not have been material to the Company’s net sales, results of operations or total assets during the three and nine month periods ended October 3, 2015. Accordingly, our consolidated results from operations do not differ materially from historical performance as a result of these acquisitions, and therefore, pro-forma results are not presented.

13

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, 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 of non-core assets and businesses, the continuation and development of key customer and supplier relationships, disruptions or delays in our supply chain, Escalade’s ability to control costs, general economic conditions, fluctuation in operating results, changes in foreign currency exchange rates, changes in the securities market, Escalade’s ability to obtain financing and to maintain compliance with the terms of such financing 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 segment through organic growth of existing categories, strategic acquisitions, and new product development now that the businesses comprising the Information Security and Print Finishing segment have been divested. The Sporting Goods segment competes in a variety of categories including basketball goals, archery, 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.

The Company has historically manufactured and distributed products for two industries: Sporting Goods; and Information Security and Print Finishing. On June 30, 2014, the Company announced the sale of its Print Finishing business. On October 1, 2014, the Company announced the sale of its Information Security business. The divestiture of these two divisions accomplishes the Company’s complete exit from the Information Security and Print Finishing segment. The Company’s decision to exit the Information Security and Print Finishing segment was influenced by low performance in this segment and lack of strategic fit. Management believes it can better achieve earnings growth through a more concentrated focus within the sporting goods equipment industry, including the traditional sports and emerging outdoor categories.

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. Concentrated focus on the sporting goods industry will allow the Company to leverage its strength in these markets.

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. In the third quarter of 2015, the Company acquired Onix Sports, Inc. to expand the Company’s offerings of pickleball paddles, balls, sportswear, and accessories, and Goalsetter Systems, Inc., (“Goalsetter”) to add another premium brand of residential in-ground basketball goals. The acquisition of Goalsetter from Co-Line Manufacturing, which will continue to manufacture the Goalsetter basketball goals in its Iowa facilities, also strengthens and diversifies the Company’s sources of basketball goals. The Company also sometimes divests or discontinues certain operations, assets, and products that do not perform to the Company's expectations or no longer fit with the Company's strategic objectives.

14

Results of Operations

The following schedule sets forth certain consolidated statement of operations data (excluding Discontinued Operations) as a percentage of net revenue:

	Three Months Ended						Nine Months Ended
	October 3, 2015			October 4, 2014			October 3, 2015			October 4, 2014
Net revenue		100.0	%		100.0	%		100.0	%		100.0	%
Cost of products sold		72.7	%		69.5	%		70.1	%		68.9	%
Gross margin		27.3	%		30.5	%		29.9	%		31.1	%
Selling, administrative and general expenses		20.0	%		15.4	%		18.8	%		17.3	%
Amortization		1.9	%		1.8	%		1.9	%		2.0	%
Operating income		5.4	%		13.3	%		9.2	%		11.8	%

Revenue and Gross Margin

Revenue from the Sporting Goods business was up 9.4% for the third quarter of 2015 and up 14.9% for the first nine months of 2015, compared with the same periods in the prior year due to sales growth across most sales channels.

The overall gross margin percentage decreased slightly to 29.9% for the first nine months of 2015, compared to 31.1% for the same period in the prior year. The decreased gross margin resulted from increased product development investments and product mix.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (SG&A) increased as a percent of net sales to 18.8% for the first nine months of 2015, compared with 17.3% experienced in the same period last year. The increase in SG&A is primarily due to increased marketing efforts in new categories acquired during 2014 as well as in new products to be introduced in the future for which the expected benefits are not immediately realized. The Company intends to continue its focus on strategic investments in product development and brand marketing throughout the remainder of the year.

Provision for Income Taxes

The effective tax rate on continuing operations for the first nine months of 2015 was 29.1% compared to 34.1% for the same period last year. The rate for the first nine months of this year is lower than prior year due to an increase in the benefit of the domestic production activities deduction and available foreign tax credits.

Financial Condition and Liquidity

Total debt at the end of the first nine months of 2015 was $31.5 million, an increase of $10.4 million from December 27, 2014. Cash used for acquisitions was the primary driver for the increase in total debt. Cash from operating profits was used to reduce long term debt and pay dividends. Notes payable increased 79% as compared with same period last year and increased 73% as compared with year end. The following schedule summarizes the Company’s total debt:

In thousands	October 3, 2015		December 27, 2014		October 4, 2014
Notes payable short-term	$	27,963	$	16,200	$	15,631
Current portion long-term debt		1,810		1,586		1,586
Long term debt		1,750		3,360		3,360
Total	$	31,523	$	21,146	$	20,577

As a percentage of stockholders’ equity, total debt was 34%, 24% and 23% at October 3, 2015, December 27, 2014, and October 4, 2014 respectively.

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.

15

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to financial market risks, including changes in currency exchange rates and interest rates. The Company attempts to minimize these risks through regular operating and financing activities and, when considered appropriate, through the use of derivative financial instruments. During the quarter there were no derivatives in use. The Company does not purchase, hold or sell derivative financial instruments for trading or speculative purposes. With the divestiture of its Information Security and Print Finishing business completed, the Company reduced its exposure to changes in currency exchange rates.

Interest Rates

The Company’s exposure to market-rate risk for changes in interest rates relates primarily to its revolving variable rate bank debt which is based on LIBOR interest rates. A hypothetical 1% or 100 basis point change in interest rates would not have a significant effect on our consolidated financial position or results of operation.

Foreign Currency

The Company conducts business in various countries around the world and is therefore subject to risks associated with fluctuating foreign exchange rates. The Sporting Goods foreign currency transactions are denominated primarily in Mexican Peso and Chinese Yuan. The Company has a 50% interest in a joint venture, Stiga, which is denominated in Swedish Krona. Revenue from discontinued operations was generated from the operations of the Company’s subsidiaries in their respective countries and surrounding geographic areas and was primarily denominated in each subsidiary’s local functional currency. These former subsidiaries incurred most of their expenses (other than inter-company expenses) in their local functional currency and include the Euro, Great Britain Pound Sterling, Mexican Peso, Chinese Yuan, Swedish Krona and South African Rand.

The geographic areas outside the United States in which the Company operated are generally not considered by management to be highly inflationary. Nonetheless, the Company’s foreign operations are sensitive to fluctuations in currency exchange rates arising from, among other things, certain inter-company transactions that are denominated in currencies other than the respective functional currency. Operating results as well as assets and liabilities are also subject to the effect of foreign currency translation when the operating results, assets and liabilities of our foreign subsidiaries are translated into U.S. dollars in our consolidated financial statements.

The Company and its subsidiaries conduct substantially all their business in their respective functional currencies to avoid the effects of cross-border transactions. To protect against reductions in value and the volatility of future cash flows caused by changes in currency exchange rates, the Company carefully considers the use of transaction and balance sheet hedging programs such as matching assets and liabilities in the same currency. Such programs reduce, but do not entirely eliminate the impact of currency exchange rate changes. The Company has evaluated the use of currency exchange hedging financial instruments but has determined that it would not use such instruments under the current circumstances. Changes in currency exchange rates may be volatile and could affect the Company’s performance.

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. Also, the Company has investments in certain unconsolidated entities. As the Company does not control or manage these entities, its disclosure controls and procedures with respect to such entities are necessarily substantially more limited than those it maintains with respect to its consolidated subsidiaries.

16

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.

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 2015.

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 2015 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS.

None.

Item 1A. RISK FACTORS.

Not required.

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

c) Issuer Purchases of Equity Securities

Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
Shares purchases prior to 7/11/2015 under the current repurchase program.		982,916	$	8.84		982,916	$	2,273,939
Third quarter purchases:
7/12/2015-8/8/2015		None		None		No Change		No Change
8/9/2015-9/5/2015		None		None		No Change		No Change
9/6/2015-10/3/2015		None		None		No Change		No Change
Total share purchases under the current program		982,916	$	8.84		982,916	$	2,273,939

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. The repurchase plan has no termination date and there have been no share repurchases that were not part of a publicly announced program.

17

Item 3. DEFAULTS UPON SENIOR SECURITIES.

None.

Item 4. MINE SAFETY DISCLOSURES.

Not applicable.

Item 5. OTHER INFORMATION.

None.

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 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

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 30, 2015	/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)

18

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Robert J. Keller, 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 30, 2015	/s/ Robert J. Keller
	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 30, 2015	/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 ending October 3, 2015 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert J. Keller, 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/ Robert J. Keller

Chief Executive Officer

October 30, 2015

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 ending October 3, 2015 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 30, 2015

XML

Discontinued Operations (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Oct. 04, 2014	Oct. 03, 2015	Oct. 04, 2014
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Net sales	$ 0	$ 4,957	$ 0	$ 20,865
Cost of products sold	0	3,530	0	13,812
Selling, administrative and general expenses	0	1,830	0	7,297
Interest expense (income)	0	(24)	0	138
Other expense	0	0	0	13
Loss Before Income Taxes	0	(379)	0	(395)
Discontinued Operations
Loss on classification as held for sale	0	0	0	(12,945)
Gain on disposal	0	5,591	0	6,138
Benefit for income taxes	0	(4,572)	0	(6,121)
Net Income (Loss) from Discontinued Operations	$ 0	$ 9,784	$ 0	$ (1,081)

XML

Acquisitions (Details Textual) - Onix Sports Inc [Member] $ in Millions	3 Months Ended
	Oct. 03, 2015 USD ($)
Business Combination, Consideration Transferred, Total	$ 10.3
Working Capital Adjustment	0.6
Working Capital Adjustment Paid	$ 0.2

XML

Equity Interest Investments (Details 1) - USD ($) $ in Thousands	Oct. 03, 2015	Dec. 27, 2014	Oct. 04, 2014
Schedule of Equity Method Investments [Line Items]
Current assets	$ 79,227	$ 68,851	$ 78,611
Total assets	149,538	127,881	130,783
Current liabilities	48,833	31,746	34,169
Total liabilities	55,614	38,102	42,985
Stiga Sports AB [Member]
Schedule of Equity Method Investments [Line Items]
Current assets	31,044	30,539	33,046
Non-current assets	9,533	8,082	8,064
Total assets	40,577	38,621	41,110
Current liabilities	7,777	7,669	10,921
Non-current liabilities	5,736	4,229	4,370
Total liabilities	13,513	11,898	15,291
Net assets	$ 27,064	$ 26,723	$ 25,819

XML

Income Taxes (Tables)

9 Months Ended

Oct. 03, 2015

Income Tax Disclosure [Abstract]

Schedule Of Uncertain Tax Benefits [Table Text Block]

The provision for income taxes was computed based on financial statement income. In accordance with FASB Accounting Standards Codification (ASC) 740, the Company has recorded the following changes in uncertain tax positions:

	Nine Months Ended
In thousands	October 3, 2015		October 4, 2014
Beginning balance	$	—	$	—
Additions for current year tax positions		—		751
Additions for prior year tax positions		—		—
Settlements		—		—
Reductions or settlements		—		(751)
Reductions for prior year tax positions		—		—
Ending balance	$	—	$	—

XML

Dividend Payment (Details Textual) - USD ($) $ / shares in Units, $ in Millions				9 Months Ended
	Sep. 21, 2015	Jun. 19, 2015	Mar. 20, 2015	Oct. 03, 2015
Dividend Payment Terms [Line Items]
Common Stock, Dividends, Per Share, Declared (in dollars per share)	$ 0.11	$ 0.11	$ 0.10	$ 0.10
Dividends, Common Stock, Cash (in dollars)	$ 1.6	$ 1.6	$ 1.4

XML

Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Oct. 03, 2015	Dec. 27, 2014	Oct. 04, 2014	Dec. 28, 2013
Financial assets, Carrying Amount
Cash and cash equivalents, Carrying Amount	$ 2,701	$ 3,232	$ 798	$ 2,346
Time deposits, Carrying Amount	0	1,450	2,450
Financial liabilities, Carrying Amount
Notes payable, Carrying Amount	27,963	16,200	15,631
Current portion of Long-term debt, Carrying Amount	1,810	1,586	1,586
Long-term debt, Carrying Amount	1,750	3,360	3,360
Fair Value, Inputs, Level 1 [Member]
Financial assets, Fair Value
Cash and cash equivalents, Fair Value	2,701	3,232	798
Time deposits, Fair Value	0	1,450	2,450
Financial liabilities, Fair Value
Notes payable, Fair Value	0	0	0
Current portion of Long-term debt, Fair Value	0	0	0
Long-term debt, Fair Value	0	0	0
Fair Value, Inputs, Level 2 [Member]
Financial assets, Fair Value
Cash and cash equivalents, Fair Value	0	0	0
Time deposits, Fair Value	0	0	0
Financial liabilities, Fair Value
Notes payable, Fair Value	27,963	16,200	15,631
Current portion of Long-term debt, Fair Value	1,810	1,586	1,586
Long-term debt, Fair Value	1,750	3,360	3,360
Fair Value, Inputs, Level 3 [Member]
Financial assets, Fair Value
Cash and cash equivalents, Fair Value	0	0	0
Time deposits, Fair Value	0	0	0
Financial liabilities, Fair Value
Notes payable, Fair Value	0	0	0
Current portion of Long-term debt, Fair Value	0	0	0
Long-term debt, Fair Value	$ 0	$ 0	$ 0

XML

Summary of Significant Accounting Policies

9 Months Ended

Oct. 03, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Consolidation and Presentation of Financial Statements Disclosure and Significant Accounting Policies [Text Block]

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 27, 2014 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 2014 filed with the Securities and Exchange Commission

XML

Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Oct. 04, 2014	Oct. 03, 2015	Oct. 04, 2014
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Weighted average common shares outstanding	14,120	13,922	14,069	13,821
Dilutive effect of stock options and restricted stock units	190	264	188	257
Weighted average common shares outstanding, assuming dilution	14,310	14,186	14,257	14,078

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Earnings Per Share (Tables)

9 Months Ended

Oct. 03, 2015

Earnings Per Share [Abstract]

Schedule of Weighted Average Number of Shares [Table Text Block]

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 4,		October 3,		October 4,
In thousands	2015		2014		2015		2014
Weighted average common shares outstanding		14,120		13,922		14,069		13,821
Dilutive effect of stock options and restricted stock units		190		264		188		257
Weighted average common shares outstanding, assuming dilution		14,310		14,186		14,257		14,078

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Segment Information (Tables)

9 Months Ended

Oct. 03, 2015

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

The Information Security and Print Finishing segment has been classified as discontinued operations for all periods presented.

	For the Three Months
	Ended October 3, 2015
	Sporting		Discontinued
In thousands	Goods		Operations		Corp.		Total
Revenues from external customers	$	34,584	$	—	$	—	$	34,584
Operating income (loss)		2,875		—		(1,002)		1,873
Net income		1,582		—		446		2,028

	As of and for the Nine Months
	Ended October 3, 2015
	Sporting		Discontinued
In thousands	Goods		Operations		Corp.		Total
Revenues from external customers	$	111,798	$	—	$	—	$	111,798
Operating income (loss)		13,372		—		(3,055)		10,317
Net income		8,035		—		712		8,747
Total assets	$	124,423	$	—	$	25,115	$	149,538

	For the Three Months
	Ended October 4, 2014
	Sporting		Discontinued
In thousands	Goods		Operations		Corp.		Total
Revenues from external customers	$	31,599	$	4,957	$	—	$	36,556
Operating income (loss)		5,113		(403)		(897)		3,813
Net income		3,103		9,784		734		13,621

	As of and for the Nine Months
	Ended October 4, 2014
	Sporting		Discontinued
In thousands	Goods		Operations		Corp.		Total
Revenues from external customers	$	97,332	$	20,865	$	—	$	118,197
Operating income (loss)		14,580		(244)		(3,109)		11,227
Net income (loss)		8,866		(1,081)		2		7,787
Total assets	$	97,343	$	—	$	33,440	$	130,783

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Earnings Per Share (Details Textual)	9 Months Ended
	Oct. 03, 2015 shares
Restricted Stock Units (RSUs) [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	4,200

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Acquisitions (Tables)

9 Months Ended

Oct. 03, 2015

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

Any changes during the measurement period may have an impact on the allocation of the purchase price, including values assigned to assets, liabilities and the amount of estimated goodwill and intangible assets represented in the table below.

In thousands
Assets acquired and liabilities assumed:
Accounts receivable	$	801
Inventories		968
Other assets		51
Goodwill		5,267
Intangible assets		6,180
Accounts payable		(259)
Other liabilities		(73)
Deferred income tax liability		(2,035)
	$	10,900

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Inventories (Details) - USD ($) $ in Thousands	Oct. 03, 2015	Dec. 27, 2014	Oct. 04, 2014
Inventory [Line Items]
Raw materials	$ 4,943	$ 3,950	$ 6,125
Work in progress	5,168	3,967	5,269
Finished goods	30,226	15,858	21,788
Total Inventory	$ 40,337	$ 23,775	$ 33,182

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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Thousands	Oct. 03, 2015	Oct. 04, 2014
Disposal Group, Including Discontinued Operation, Cash and Cash Equivalents	$ 0	$ 1,255

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Equity Interest Investments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Oct. 04, 2014	Oct. 03, 2015	Oct. 04, 2014
Other income	$ 1,108	$ 1,914	$ 2,356	$ 2,315
Stiga Sports B [Member]
Other income	$ 1,069	$ 1,786	$ 2,080	$ 2,169

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Discontinued Operations (Details Textual) $ in Millions	9 Months Ended
	Oct. 04, 2014 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Asset Impairment Charges, Total	$ 12.9

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CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Thousands	Oct. 03, 2015	Dec. 27, 2014	Oct. 04, 2014
Current Assets:
Cash and cash equivalents	$ 2,701	$ 3,232	$ 798
Time deposits	0	1,450	2,450
Receivables, less allowance of $885; $900; and $844; respectively	31,407	32,150	30,214
Inventories	40,337	23,775	33,182
Prepaid expenses	2,134	1,622	1,699
Deferred income tax benefit	949	925	2,302
Prepaid income tax	1,699	5,697	7,966
TOTAL CURRENT ASSETS	79,227	68,851	78,611
Property, plant and equipment, net	13,848	11,596	10,858
Intangible assets, net	17,517	13,465	9,145
Goodwill	20,142	14,875	13,242
Investments	18,799	18,949	18,782
Other assets	5	145	145
TOTAL ASSETS	149,538	127,881	130,783
Current Liabilities:
Notes payable	27,963	16,200	15,631
Current portion of long-term debt	1,810	1,586	1,586
Trade accounts payable	6,630	1,853	5,949
Accrued liabilities	12,430	12,107	11,003
TOTAL CURRENT LIABILITIES	48,833	31,746	34,169
Other Liabilities:
Long-term debt	1,750	3,360	3,360
Deferred income tax liability	5,031	2,996	5,456
TOTAL LIABILITIES	$ 55,614	$ 38,102	$ 42,985
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 - 14,125,935; 13,998,090; and 13,950,874; shares respectively	$ 14,126	$ 13,998	$ 13,951
Retained earnings	83,064	77,745	74,892
Accumulated other comprehensive loss	(3,266)	(1,964)	(1,045)
TOTAL STOCKHOLDERS' EQUITY	93,924	89,779	87,798
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 149,538	$ 127,881	$ 130,783

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Acquisitions (Details) - USD ($) $ in Thousands	Oct. 03, 2015	Dec. 27, 2014	Oct. 04, 2014
Assets acquired and liabilities assumed:
Goodwill	$ 20,142	$ 14,875	$ 13,242
Goalsetter [Member]
Assets acquired and liabilities assumed:
Accounts receivable	801
Inventories	968
Other assets	51
Goodwill	5,267
Intangible assets	6,180
Accounts payable	(259)
Other liabilities	(73)
Deferred income tax liability	(2,035)
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net, Total	$ 10,900

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CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Oct. 04, 2014	Oct. 03, 2015	Oct. 04, 2014
Net Income	$ 2,028	$ 13,621	$ 8,747	$ 7,787
Foreign currency translation adjustment before reclassifications	168	(2,661)	(1,302)	(3,399)
Amounts reclassified from comprehensive income due to divestiture	0	(2,565)	0	(2,565)
Comprehensive Income	$ 2,196	$ 8,395	$ 7,445	$ 1,823

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Equity Interest Investments (Details Textual) - USD ($) $ in Millions	9 Months Ended
	Oct. 03, 2015	Oct. 04, 2014
Schedule of Equity Method Investments [Line Items]
Adjustments For Net Income Impact	$ 0.0
Stiga Sports AB [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	50.00%
Amortization Of Goodwill	$ 10.7	$ 12.4
Goodwill, Translation Adjustments	14.9	17.3
Cumulative goodwill adjustments, tax effect	$ 4.2	4.9
Adjustments For Net Income Impact		$ 0.3
Stiga Sports AB [Member] | Parent [Member]
Schedule of Equity Method Investments [Line Items]
Equity Method Investment, Ownership Percentage	50.00%

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Acquisitions

9 Months Ended

Oct. 03, 2015

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Note N – Acquisitions

During the third quarter of 2015, the Company acquired certain assets and liabilities of Onix Sports, Inc. and acquired all of the issued and outstanding shares of capital stock of Goalsetter Systems, Inc. for total consideration of cash and notes of approximately $10.3 million, subject to adjustments for working capital. The Company anticipates that total working capital adjustments will result in $0.6 million of additional consideration to the sellers, of which $0.2 million was paid during the third quarter of 2015.

The consideration paid by the company for these acquisitions is allocated to the assets acquired, net of the liabilities assumed, based upon their estimated fair values as of the date of the acquisition. The excess of the purchase price over the estimated fair value of the assets acquired, net of the estimated fair value of the liabilities assumed, is recorded as goodwill. The Company has not yet finalized the purchase price or its final evaluation of the fair value of certain assets acquired. The primary areas of the purchase price allocation that are not yet finalized relate to the valuation of intangible assets acquired, deferred income taxes and residual goodwill. Any changes during the measurement period may have an impact on the allocation of the purchase price, including values assigned to assets, liabilities and the amount of estimated goodwill and intangible assets represented in the table below.

In thousands
Assets acquired and liabilities assumed:
Accounts receivable	$	801
Inventories		968
Other assets		51
Goodwill		5,267
Intangible assets		6,180
Accounts payable		(259)
Other liabilities		(73)
Deferred income tax liability		(2,035)
	$	10,900

These acquisitions were not and would not have been material to the Company’s net sales, results of operations or total assets during the three and nine month periods ended October 3, 2015. Accordingly, our consolidated results from operations do not differ materially from historical performance as a result of these acquisitions, and therefore, pro-forma results are not presented.

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Income Taxes (Details) - USD ($) $ in Thousands	9 Months Ended
	Oct. 03, 2015	Oct. 04, 2014
Income Tax Contingency [Line Items]
Beginning balance	$ 0	$ 0
Additions for current year tax positions	0	751
Additions for prior year tax positions	0	0
Settlements	0	0
Reductions or settlements	0	(751)
Reductions for prior year tax positions	0	0
Ending balance	$ 0	$ 0

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Equity Interest Investments (Tables)

9 Months Ended

Oct. 03, 2015

Equity Method Investments and Joint Ventures [Abstract]

Schedule of Other Nonoperating Income (Expense) [Table Text Block]

The Company’s 50% portion of net income for Stiga, included in other income (expense) on the Company’s statements of operations, for the periods ended October 3, 2015 and October 4, 2014 is as follows:

	Three Months Ended				Nine Months Ended
	October 3,		October 4,		October 3,		October 4,
In thousands	2015		2014		2015		2014
Other income	$	1,069	$	1,786	$	2,080	$	2,169

Schedule of Joint Ventures Financial Information [Table Text Block]

Summarized financial information for Stiga Sports AB balance sheets as of October 3, 2015, December 27, 2014, and October 4, 2014 and statements of operations for the three month and nine month periods ended October 3, 2015 and October 4, 2014 is as follows:

	October 3,		December 27,		October 4,
In thousands	2015		2014		2014
Current assets	$	31,044	$	30,539	$	33,046
Non-current assets		9,533		8,082		8,064
Total assets		40,577		38,621		41,110
Current liabilities		7,777		7,669		10,921
Non-current liabilities		5,736		4,229		4,370
Total liabilities		13,513		11,898		15,291
Net assets	$	27,064	$	26,723	$	25,819

Schedule of Joint Ventures Income Statement Information [Table Text Block]

	Three Months Ended				Nine Months Ended
	October 3,		October 4,		October 3,		October 4,
In thousands	2015		2014		2015		2014
Net sales	$	12,846	$	17,206	$	30,161	$	33,944
Gross profit		6,304		8,308		14,899		16,654
Net income		2,138		3,581		3,346		3,969

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CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Oct. 03, 2015	Oct. 04, 2014
Operating Activities:
Net income	$ 8,747	$ 7,787
Reconciling adjustments:
Depreciation and amortization	3,812	3,331
Loss (gain) on disposal of property and equipment	1	(1)
Stock-based compensation	440	447
Additional discontinued operations activities	0	2,722
Changes in
Adjustments necessary to reconcile net income (loss) to net cash provided by operating activities	(8,147)	(5,198)
Net cash provided by operating activities	4,853	9,088
Investing Activities:
Purchase of property and equipment	(3,900)	(1,680)
Purchase of short-term time deposits	0	(2,000)
Acquisitions	(10,300)	(162)
Proceeds from sale of property and equipment	0	17
Dividends received from equity method investments	928	0
Proceeds from disposal of short-term time deposits	1,450	1,250
Discontinued operations activities	0	5,700
Net cash provided (used) by investing activities	(11,822)	3,125
Financing Activities:
Net increase (decrease) in notes payable	11,764	(6,069)
Principal payments on long-term debt	(1,586)	(1,562)
Proceeds from exercise of stock options	733	1,354
Cash dividends paid	(4,511)	(3,894)
Director stock compensation	38	114
Net cash provided (used) by financing activities	6,438	(10,057)
Effect of exchange rate changes on cash	0	(3,704)
Net decrease in cash and cash equivalents	(531)	(1,548)
Cash and cash equivalents, beginning of period (includes zero and $1,255 respectively of cash reported as assets held for sale)	3,232	2,346
Cash and cash equivalents, end of period	2,701	798
Supplemental Cash Flows Information
Dividends payable	3	45
Non-Cash Transactions
Note payable for deferred purchase price obligation	$ 200	$ 0

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CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Oct. 03, 2015	Dec. 27, 2014	Oct. 04, 2014
Receivables allowance (in dollars)	$ 885	$ 900	$ 844
Preferred stock, shares authorized	1,000,000	1,000,000	1,000,000
Preferred stock, shares issued	0	0	0
Common stock, shares authorized	30,000,000	30,000,000	30,000,000
Common stock, shares issued	14,125,935	13,998,090	13,950,874
Common stock, shares outstanding	14,125,935	13,998,090	13,950,874

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Segment Information

9 Months Ended

Oct. 03, 2015

Segment Reporting [Abstract]

Segment Reporting Disclosure [Text Block]

Note I - Segment Information

The Information Security and Print Finishing segment has been classified as discontinued operations for all periods presented.

	For the Three Months
	Ended October 3, 2015
	Sporting		Discontinued
In thousands	Goods		Operations		Corp.		Total
Revenues from external customers	$	34,584	$	—	$	—	$	34,584
Operating income (loss)		2,875		—		(1,002)		1,873
Net income		1,582		—		446		2,028

	As of and for the Nine Months
	Ended October 3, 2015
	Sporting		Discontinued
In thousands	Goods		Operations		Corp.		Total
Revenues from external customers	$	111,798	$	—	$	—	$	111,798
Operating income (loss)		13,372		—		(3,055)		10,317
Net income		8,035		—		712		8,747
Total assets	$	124,423	$	—	$	25,115	$	149,538

	For the Three Months
	Ended October 4, 2014
	Sporting		Discontinued
In thousands	Goods		Operations		Corp.		Total
Revenues from external customers	$	31,599	$	4,957	$	—	$	36,556
Operating income (loss)		5,113		(403)		(897)		3,813
Net income		3,103		9,784		734		13,621

	As of and for the Nine Months
	Ended October 4, 2014
	Sporting		Discontinued
In thousands	Goods		Operations		Corp.		Total
Revenues from external customers	$	97,332	$	20,865	$	—	$	118,197
Operating income (loss)		14,580		(244)		(3,109)		11,227
Net income (loss)		8,866		(1,081)		2		7,787
Total assets	$	97,343	$	—	$	33,440	$	130,783

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Document And Entity Information - shares	9 Months Ended
	Oct. 03, 2015	Oct. 27, 2015
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Oct. 03, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Entity Registrant Name	ESCALADE INC
Entity Central Index Key	0000033488
Current Fiscal Year End Date	--12-26
Entity Filer Category	Accelerated Filer
Trading Symbol	ESCA
Entity Common Stock, Shares Outstanding		14,129,986

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Dividend Payment

9 Months Ended

Oct. 03, 2015

Payments of Dividends [Abstract]

Dividend Payment Terms [Text Block]

Note J – Dividend Payment

On September 21, 2015, the company paid a quarterly dividend of $0.11 per common share to all shareholders of record on September 14, 2015. The total amount of the dividend was approximately $1.6 million and was charged against retained earnings.

On June 19, 2015, the company paid a quarterly dividend of $0.11 per common share to all shareholders of record on June 12, 2015. The total amount of the dividend was approximately $1.6 million and was charged against retained earnings.

On March 20, 2015, the Company paid a quarterly dividend of $0.10 per common share to all shareholders of record on March 13, 2015. The total amount of the dividend was approximately $1.4 million and was charged against retained earnings.

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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Oct. 04, 2014	Oct. 03, 2015	Oct. 04, 2014
Net sales	$ 34,584	$ 31,599	$ 111,798	$ 97,332
Costs, Expenses and Other Income
Cost of products sold	25,156	21,945	78,336	67,102
Selling, administrative and general expenses	6,905	4,871	21,018	16,865
Amortization	650	567	2,127	1,894
Operating Income	1,873	4,216	10,317	11,471
Interest expense	108	133	340	324
Other expense (income)	(1,108)	(1,914)	(2,356)	(2,315)
Income Before Income Taxes from Continuing Operations	2,873	5,997	12,333	13,462
Provision for Income Taxes from Continuing Operations	845	2,160	3,586	4,594
Net Income from Continuing Operations	2,028	3,837	8,747	8,868
Discontinued Operations
Loss from operations	0	(379)	0	(395)
Loss on classification as held for sale	0	0	0	(12,945)
Gain on disposal (includes $2,565 of accumulated other comprehensive income reclassification from foreign currency translation adjustment)	0	5,591	0	6,138
Provision (benefit) for income taxes	0	(4,572)	0	(6,121)
Net Income (Loss) from Discontinued Operations	0	9,784	0	(1,081)
Net Income	$ 2,028	$ 13,621	$ 8,747	$ 7,787
Basic Earnings Per Share Data:
Income from continuing operations (in dollars per share)	$ 0.14	$ 0.28	$ 0.62	$ 0.64
Income (Loss) from discontinued operations (in dollars per share)	0	0.7	0	(0.08)
Net Income (in dollars per share)	0.14	0.98	0.62	0.56
Diluted Earnings Per Share Data:
Income from continuing operations (in dollars per share)	0.14	0.27	0.61	0.63
Income (Loss) from discontinued operations (in dollars per share)	0	0.69	0	(0.08)
Net Income (in dollars per share)	0.14	0.96	0.61	0.55
Dividends declared	$ 0.11	$ 0.1	$ 0.32	$ 0.28

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Equity Interest Investments

9 Months Ended

Oct. 03, 2015

Equity Method Investments and Joint Ventures [Abstract]

Equity Method Investments Disclosure [Text Block]

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 goodwill for Stiga was fully amortized as of December 27, 2014. The effect on Stiga’s net assets resulting from the cumulative amortization of goodwill for the periods ended October 3, 2015 and October 4, 2014 are addbacks to Stiga’s consolidated net assets of $10.7 million and $12.4 million, respectively. These net differences are comprised of cumulative goodwill adjustments of $14.9 million offset by the related cumulative tax effect of $4.2 million as of October 3, 2015 and cumulative goodwill adjustments of $17.3 million offset by the related cumulative tax effect of $4.9 million as of October 4, 2014. The Company’s 50% portion of the statement of operations impact of these goodwill and tax adjustments and other individually insignificant U.S. GAAP adjustments for the nine month periods ended October 3, 2015, and October 4, 2014 are to increase Stiga’s net income by approximately zero and $0.3 million, respectively. The Company’s 50% portion of net income for Stiga, included in other income (expense) on the Company’s statements of operations, for the periods ended October 3, 2015 and October 4, 2014 is as follows:

	Three Months Ended				Nine Months Ended
	October 3,		October 4,		October 3,		October 4,
In thousands	2015		2014		2015		2014
Other income	$	1,069	$	1,786	$	2,080	$	2,169

Summarized financial information for Stiga Sports AB balance sheets as of October 3, 2015, December 27, 2014, and October 4, 2014 and statements of operations for the three month and nine month periods ended October 3, 2015 and October 4, 2014 is as follows:

	October 3,		December 27,		October 4,
In thousands	2015		2014		2014
Current assets	$	31,044	$	30,539	$	33,046
Non-current assets		9,533		8,082		8,064
Total assets		40,577		38,621		41,110
Current liabilities		7,777		7,669		10,921
Non-current liabilities		5,736		4,229		4,370
Total liabilities		13,513		11,898		15,291
Net assets	$	27,064	$	26,723	$	25,819

	Three Months Ended				Nine Months Ended
	October 3,		October 4,		October 3,		October 4,
In thousands	2015		2014		2015		2014
Net sales	$	12,846	$	17,206	$	30,161	$	33,944
Gross profit		6,304		8,308		14,899		16,654
Net income		2,138		3,581		3,346		3,969

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Inventories

9 Months Ended

Oct. 03, 2015

Inventory Disclosure [Abstract]

Inventory Disclosure [Text Block]

Note C - Inventories

	October 3,		December 27,		October 4,
In thousands	2015		2014		2014
Raw materials	$	4,943	$	3,950	$	6,125
Work in progress		5,168		3,967		5,269
Finished goods		30,226		15,858		21,788
	$	40,337	$	23,775	$	33,182

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Inventories (Tables)

9 Months Ended

Oct. 03, 2015

Inventory Disclosure [Abstract]

Schedule of Inventory, Current [Table Text Block]

	October 3,		December 27,		October 4,
In thousands	2015		2014		2014
Raw materials	$	4,943	$	3,950	$	6,125
Work in progress		5,168		3,967		5,269
Finished goods		30,226		15,858		21,788
	$	40,337	$	23,775	$	33,182

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Earnings Per Share

9 Months Ended

Oct. 03, 2015

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note K - 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 4,		October 3,		October 4,
In thousands	2015		2014		2015		2014
Weighted average common shares outstanding		14,120		13,922		14,069		13,821
Dilutive effect of stock options and restricted stock units		190		264		188		257
Weighted average common shares outstanding, assuming dilution		14,310		14,186		14,257		14,078

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. No stock options or restricted stock units were excluded in the computation of dilutive earnings per share in 2014. In 2015, there were 4,200 restricted stock units excluded from the computation of dilutive earnings per share.

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Stock Compensation

9 Months Ended

Oct. 03, 2015

Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract]

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

Note G – 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, 2015 and pursuant to the 2007 Incentive Plan, in lieu of cash payments of director fees, the Company awarded to certain directors 2,311 shares of common stock. In addition, the Company awarded 10,000 restricted stock units to directors and 42,450 restricted stock units 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. The 2015 restricted stock units awarded to employees vest over four years (one-third two years from grant date, one-third three years from grant date and one-third four years from grant date) provided that the employee is still employed by the Company and that the performance criteria related to the market price of the Company’s stock is satisfied. The criteria is for any 30 consecutive trading days on the NASDAQ Stock Market (or such other principal securities exchange on which the Company’s shares of common stock are then traded) during the period beginning on the grant date and ending on the fourth anniversary thereof, the cumulative average Volume Weighted Average Price per share is at least 15% higher than the closing price per share on the grant date plus any incremental dividends paid above the current quarterly dividend rate of $0.10 per share by the Company during such four year period. The performance criteria for the 38,250 restricted stock units awarded to employees in the first quarter of 2015 was satisfied during the second quarter of 2015. The Company utilizes the Monte Carlo technique to determine the fair value of restricted stock units granted for awards with market conditions.

For the three months and nine months ended October 3, 2015, including expense associated with issuing certain directors stock in lieu of cash for certain director fees, the Company recognized stock based compensation expense of $155 thousand and $478 thousand, respectively, compared to stock based compensation expense of $161 thousand and $561 thousand for the same periods in the prior year. At October 3, 2015 and October 4, 2014, respectively, there was $0.8 million and $0.8 million in unrecognized stock-based compensation expense related to non-vested stock awards.

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Income Taxes

9 Months Ended

Oct. 03, 2015

Income Tax Disclosure [Abstract]

Income Tax Disclosure [Text Block]

Note E – Income Taxes

The provision for income taxes was computed based on financial statement income. In accordance with FASB Accounting Standards Codification (ASC) 740, the Company has recorded the following changes in uncertain tax positions:

	Nine Months Ended
In thousands	October 3, 2015		October 4, 2014
Beginning balance	$	—	$	—
Additions for current year tax positions		—		751
Additions for prior year tax positions		—		—
Settlements		—		—
Reductions or settlements		—		(751)
Reductions for prior year tax positions		—		—
Ending balance	$	—	$	—

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Fair Values of Financial Instruments

9 Months Ended

Oct. 03, 2015

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Note F – 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 and Time Deposits

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

Notes Payable and Long-term Debt

Fair values of notes payable and long-term debt approximates the carrying value and 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, 2015, December 27, 2014 and October 4, 2014.

			Fair Value Measurements Using
			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
October 3, 2015	Carrying		Assets		Inputs		Inputs
In thousands	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	2,701	$	2,701	$	—	$	—
Time deposits	$	—	$	—	$	—	$	—
Financial liabilities
Notes payable	$	27,963	$	—	$	27,963	$	—
Current portion of long-term debt	$	1,810	$	—	$	1,810	$	—
Long-term debt	$	1,750	$	—	$	1,750	$	—

			Fair Value Measurements Using
			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
December 27, 2014	Carrying		Assets		Inputs		Inputs
In thousands	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	3,232	$	3,232	$	—	$	—
Time deposits	$	1,450	$	1,450	$	—	$	—
Financial liabilities
Notes payable	$	16,200	$	—	$	16,200	$	—
Current portion of long-term debt	$	1,586	$	—	$	1,586	$	—
Long-term debt	$	3,360	$	—	$	3,360	$	—

			Fair Value Measurements Using
			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
October 4, 2014	Carrying		Assets		Inputs		Inputs
In thousands	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	798	$	798	$	—	$	—
Time deposits	$	2,450	$	2,450	$	—	$	—
Financial liabilities
Notes payable	$	15,631	$	—	$	15,631	$	—
Current portion of Long-term debt	$	1,586	$	—	$	1,586	$	—
Long-term debt	$	3,360	$	—	$	3,360	$	—

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Discontinued Operations

9 Months Ended

Oct. 03, 2015

Discontinued Operations and Disposal Groups [Abstract]

Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]

Note H – Discontinued Operations

On October 1, 2014, the Company completed the sale of the Information Security business. The sale of the Information Security business, coupled with the sale of our Print Finishing business on June 30, 2014, represents the Company’s exit from the Information Security and Print Finishing segment. As a result, the Information Security and Print Finishing segment has been classified as discontinued operations for all periods presented and certain assets and liabilities in prior periods are classified as held for sale.

The carrying value of these assets was greater than their fair value, less the cost to sell the Information Security business, resulting in an impairment of certain accounts receivables, inventories, long-lived assets, intangible assets and other assets totaling $12.9 million. The impairment charge reduced the carrying value of intangible assets to fair value and the remaining assets to the lower of their carrying amount or fair value less cost to sell. The fair value for these assets was determined by estimating the most likely sale price with a third-party buyer based on market data. The Company does not expect to have any further significant losses to record in the future for these assets. Because of the significance of the unobservable inputs and management’s judgment used in the assets held for sell analysis, these measurements were classified in level three of the valuation hierarchy.

The results of operations presented as discontinued operations are summarized below.

	Three Months Ended				Nine Months Ended
	October 3,		October 4,		October 3,		October 4,
All Amounts in Thousands	2015		2014		2015		2014
Net sales	$	—	$	4,957	$	—	$	20,865
Cost of products sold		—		3,530		—		13,812
Selling, administrative and general expenses		—		1,830		—		7,297
Interest expense (income)		—		(24)		—		138
Other expense		—		—		—		13
Loss Before Income Taxes		—		(379)		—		(395)
Discontinued Operations
Loss on classification as held for sale		—		—		—		(12,945)
Gain on disposal		—		5,591		—		6,138
Benefit for income taxes		—		(4,572)		—		(6,121)
Net Income (Loss) from Discontinued Operations	$	—	$	9,784	$	—	$	(1,081)

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Equity Interest Investments (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Oct. 04, 2014	Oct. 03, 2015	Oct. 04, 2014
Schedule of Equity Method Investments [Line Items]
Net sales	$ 34,584	$ 31,599	$ 111,798	$ 97,332
Net income	2,028	13,621	8,747	7,787
Stiga Sports AB [Member]
Schedule of Equity Method Investments [Line Items]
Net sales	12,846	17,206	30,161	33,944
Gross profit	6,304	8,308	14,899	16,654
Net income	$ 2,138	$ 3,581	$ 3,346	$ 3,969

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Commitments and Contingencies

9 Months Ended

Oct. 03, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

Note M – 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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Fair Values of Financial Instruments (Tables)

9 Months Ended

Oct. 03, 2015

Fair Value Disclosures [Abstract]

Fair Value, by Balance Sheet Grouping [Table Text Block]

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, 2015, December 27, 2014 and October 4, 2014.

			Fair Value Measurements Using
			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
October 3, 2015	Carrying		Assets		Inputs		Inputs
In thousands	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	2,701	$	2,701	$	—	$	—
Time deposits	$	—	$	—	$	—	$	—
Financial liabilities
Notes payable	$	27,963	$	—	$	27,963	$	—
Current portion of long-term debt	$	1,810	$	—	$	1,810	$	—
Long-term debt	$	1,750	$	—	$	1,750	$	—

			Fair Value Measurements Using
			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
December 27, 2014	Carrying		Assets		Inputs		Inputs
In thousands	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	3,232	$	3,232	$	—	$	—
Time deposits	$	1,450	$	1,450	$	—	$	—
Financial liabilities
Notes payable	$	16,200	$	—	$	16,200	$	—
Current portion of long-term debt	$	1,586	$	—	$	1,586	$	—
Long-term debt	$	3,360	$	—	$	3,360	$	—

			Fair Value Measurements Using
			Quoted
			Prices in
			Active		Significant
			Markets for		Other		Significant
			Identical		Observable		Unobservable
October 4, 2014	Carrying		Assets		Inputs		Inputs
In thousands	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	798	$	798	$	—	$	—
Time deposits	$	2,450	$	2,450	$	—	$	—
Financial liabilities
Notes payable	$	15,631	$	—	$	15,631	$	—
Current portion of Long-term debt	$	1,586	$	—	$	1,586	$	—
Long-term debt	$	3,360	$	—	$	3,360	$	—

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Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Oct. 04, 2014	Oct. 03, 2015	Oct. 04, 2014	Dec. 27, 2014
Segment Reporting Information [Line Items]
Revenues from external customers	$ 34,584	$ 36,556	$ 111,798	$ 118,197
Operating income (loss)	1,873	3,813	10,317	11,227
Net income	2,028	13,621	8,747	7,787
Total assets	149,538	130,783	149,538	130,783	$ 127,881
Sporting Goods [Member]
Segment Reporting Information [Line Items]
Revenues from external customers	34,584	31,599	111,798	97,332
Operating income (loss)	2,875	5,113	13,372	14,580
Net income	1,582	3,103	8,035	8,866
Total assets	124,423	97,343	124,423	97,343
Discontinued Operations [Member]
Segment Reporting Information [Line Items]
Revenues from external customers	0	4,957	0	20,865
Operating income (loss)	0	(403)	0	(244)
Net income	0	9,784	0	(1,081)
Total assets	0	0	0	0
Corporate Segment [Member]
Segment Reporting Information [Line Items]
Revenues from external customers	0	0	0	0
Operating income (loss)	(1,002)	(897)	(3,055)	(3,109)
Net income	446	734	712	2
Total assets	$ 25,115	$ 33,440	$ 25,115	$ 33,440

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CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Oct. 03, 2015	Oct. 04, 2014	Oct. 03, 2015	Oct. 04, 2014
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Reclassification Adjustment from AOCI, Realized upon Sale or Liquidation, Net of Tax	$ 0	$ 2,565	$ 0	$ 2,565

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Seasonal Aspects

9 Months Ended

Oct. 03, 2015

Accounting Policies [Abstract]

Seasonal Aspects [Text Block]

Note B - Seasonal Aspects

The results of operations for the three and nine month periods ended October 3, 2015 and October 4, 2014 are not necessarily indicative of the results to be expected for the full year.

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Discontinued Operations (Tables)

9 Months Ended

Oct. 03, 2015

Discontinued Operations and Disposal Groups [Abstract]

Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block]

The results of operations presented as discontinued operations are summarized below.

	Three Months Ended				Nine Months Ended
	October 3,		October 4,		October 3,		October 4,
All Amounts in Thousands	2015		2014		2015		2014
Net sales	$	—	$	4,957	$	—	$	20,865
Cost of products sold		—		3,530		—		13,812
Selling, administrative and general expenses		—		1,830		—		7,297
Interest expense (income)		—		(24)		—		138
Other expense		—		—		—		13
Loss Before Income Taxes		—		(379)		—		(395)
Discontinued Operations
Loss on classification as held for sale		—		—		—		(12,945)
Gain on disposal		—		5,591		—		6,138
Benefit for income taxes		—		(4,572)		—		(6,121)
Net Income (Loss) from Discontinued Operations	$	—	$	9,784	$	—	$	(1,081)

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Stock Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Thousands				3 Months Ended		9 Months Ended
	Sep. 21, 2015	Jun. 19, 2015	Mar. 20, 2015	Oct. 03, 2015	Oct. 04, 2014	Oct. 03, 2015	Oct. 04, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Allocated Share-based Compensation Expense				$ 155	$ 161	$ 478	$ 561
Employee and Non Employee Service Share-based Compensation Nonvested Awards Total Compensation Cost Not Yet Recognized				$ 800	$ 800	$ 800	$ 800
Cumulative Average Volume Weighted Average Price Per Share						15.00%
Common Stock, Dividends, Per Share, Cash Paid	$ 0.11	$ 0.11	$ 0.10			$ 0.10
Stock Issued During Period, Shares, Restricted Stock Award, Gross						38,250
Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross						2,311
Employee Stock Option [Member] | Director [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross						10,000
Employee Stock Option [Member] | Restricted Stock Units (RSUs) [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Issued During Period, Shares, Share-based Compensation, Gross						42,450

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New Accounting Standards

9 Months Ended

Oct. 03, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

Note L – New Accounting Standards

There have been no recent accounting pronouncements or changes in accounting pronouncements during the nine months ended October 3, 2015, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 27, 2014, that are of significance, or potential significance to the Company.