10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

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

For the quarterly period ended July 9, 2022 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)

812-467-1358

(Registrant's Telephone Number)

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

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

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

Yes☒ No ☐

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

Yes ☒ No ☐

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

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

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

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

Yes ☐ No ☒

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

Class	Outstanding at August 1, 2022
Common, no par value	13,590,407

1

INDEX

		Page No.
Part I.	Financial Information:
Item 1 -	Financial Statements:
	Consolidated Condensed Balance Sheets as of July 9, 2022, December 25, 2021, and July 10, 2021	3
	Consolidated Condensed Statements of Operations for the Three Months and Six Months Ended July 9, 2022 and July 10, 2021	4
	Consolidated Condensed Statements of Stockholders’ Equity for the Three Months and Six Months Ended July 9, 2022 and July 10, 2021	5
	Consolidated Condensed Statements of Cash Flows for the Six Months Ended July 9, 2022 and July 10, 2021	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	17
Part II.	Other Information
Item 1A -	Risk Factors	17
Item 2 -	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 6 -	Exhibits	19
	Signature	19

2

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

ESCALADE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED BALANCE SHEETS

All Amounts in Thousands Except Share Information	July 9, 2022		December 25, 2021		July 10, 2021
	(Unaudited)		(Audited)		(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	6,195	$	4,374	$	10,641
Receivables, less allowance of $726; $457; and $717; respectively		60,011		65,991		52,248
Inventories		130,246		92,382		86,612
Prepaid expenses		7,263		7,569		4,775
Prepaid income tax		621		739		--
TOTAL CURRENT ASSETS		204,336		171,055		154,276
Property, plant and equipment, net		28,344		24,936		20,792
Operating lease right-of-use assets		9,318		2,210		2,079
Intangible assets, net		35,353		20,778		21,638
Goodwill		39,226		32,695		32,695
Other assets		275		124		137
TOTAL ASSETS	$	316,852	$	251,798	$	231,617
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt	$	7,143	$	7,143	$	7,143
Trade accounts payable		24,650		15,847		14,705
Accrued liabilities		20,483		24,385		14,875
Income tax payable		--		--		180
Current operating lease liabilities		676		818		1,526
TOTAL CURRENT LIABILITIES		52,952		48,193		38,429
Other Liabilities:
Long‑term debt		94,040		50,396		42,857
Deferred income tax liability		4,759		4,759		4,193
Operating lease liabilities		8,660		1,387		557
Other liabilities		448		448		448
TOTAL LIABILITIES		160,859		105,183		86,484
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 – 13,590,407; 13,493,332; and 13,779,489; shares respectively		13,590		13,493		13,779
Retained earnings		142,403		133,122		131,354
TOTAL STOCKHOLDERS' EQUITY		155,993		146,615		145,133
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	316,852	$	251,798	$	231,617

See notes to Consolidated Condensed Financial Statements.

3

ESCALADE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three Months Ended						Six Months Ended
All Amounts in Thousands Except Per Share Data	July 9, 2022			July 10, 2021			July 9, 2022			July 10, 2021
Net sales	$	94,337		$	99,679		$	166,717		$	158,870
Costs and Expenses
Cost of products sold		70,613			74,606			122,874			116,363
Selling, administrative and general expenses		14,680			13,810			25,206			23,686
Amortization		855			577			1,425			1,006
Operating Income		8,189			10,686			17,212			17,815
Other Income (Expense)
Interest expense		(948	)		(387	)		(1,508	)		(621	)
Other income		29			21			72			56
Income Before Income Taxes		7,270			10,320			15,776			17,250
Provision for Income Taxes		1,597			2,194			3,449			3,682
Net Income	$	5,673		$	8,126		$	12,327		$	13,568
Earnings Per Share Data:
Basic earnings per share	$	0.42		$	0.59		$	0.91		$	0.98
Diluted earnings per share	$	0.42		$	0.58		$	0.91		$	0.97
Dividends declared	$	0.15		$	0.14		$	0.30		$	0.28

See notes to Consolidated Condensed Financial Statements.

4

ESCALADE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS’ EQUITY (UNAUDITED)

	Common Stock						Retained
All Amounts in Thousands	Shares			Amount			Earnings			Total
Balances at March 20, 2021		13,925		$	13,925		$	127,975		$	141,900
Net income								8,126			8,126
Expense of stock options and restricted stock units								326			326
Settlement of restricted stock units		1			1			(1	)		--
Dividends declared								(1,937	)		(1,937	)
Purchase of stock		(153	)		(153	)		(3,264	)		(3,417	)
Stock issued to directors as compensation		6			6			129			135
Balances at July 10, 2021		13,779		$	13,779		$	131,354		$	145,133
Balances at December 26, 2020		13,919		$	13,919		$	125,237		$	139,156
Net income								13,568			13,568
Expense of stock options and restricted stock units								437			437
Exercise of stock options		10			10			134			144
Settlement of restricted stock units		46			46			(46	)		--
Dividends declared								(3,887	)		(3,887	)
Purchase of stock		(202	)		(202	)		(4,218	)		(4,420	)
Stock issued to directors as compensation		6			6			129			135
Balances at July 10, 2021		13,779		$	13,779		$	131,354		$	145,133

	Common Stock				Retained
All Amounts in Thousands	Shares		Amount		Earnings			Total
Balances at March 19, 2022		13,585	$	13,585	$	138,034		$	151,619
Net income						5,673			5,673
Expense of restricted stock units						688			688
Settlement of restricted stock units		1		1		(1	)		--
Dividends declared						(2,038	)		(2,038	)
Stock issued to directors as compensation		4		4		47			51
Balances at July 9, 2022		13,590	$	13,590	$	142,403		$	155,993
Balances at December 25, 2021		13,493	$	13,493	$	133,122		$	146,615
Net income						12,327			12,327
Expense of restricted stock units						1,076			1,076
Settlement of restricted stock units		93		93		(93	)		--
Dividends declared						(4,076	)		(4,076	)
Stock issued to directors as compensation		4		4		47			51
Balances at July 9, 2022		13,590	$	13,590	$	142,403		$	155,993

See notes to Consolidated Condensed Financial Statements.

5

ESCALADE, INCORPORATED AND SUBSIDIARIES

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

	Six Months Ended
All Amounts in Thousands	July 9, 2022			July 10, 2021
Operating Activities:
Net income	$	12,327		$	13,568
Depreciation and amortization		3,603			2,709
Provision for doubtful accounts		258			(152	)
Stock-based compensation		1,076			437
Gain on disposal of property and equipment		--			(26	)
Adjustments necessary to reconcile net income to net cash used by operating activities		(17,589	)		(17,030	)
Net cash used by operating activities		(325	)		(494	)
Investing Activities:
Purchase of property and equipment		(1,536	)		(4,278	)
Proceeds from sale of property and equipment		--			42
Acquisitions		(35,757	)		--
Net cash used by investing activities		(37,293	)		(4,236	)
Financing Activities:
Proceeds from issuance of long-term debt		124,571			162,666
Payments on long-term debt		(80,927	)		(142,739	)
Proceeds from exercise of stock options		--			144
Purchase of stock		--			(4,420	)
Director stock compensation		51			135
Deferred financing fees		(180	)		(33	)
Cash dividends paid		(4,076	)		(3,887	)
Net cash provided by financing activities		39,439			11,866
Net increase in cash and cash equivalents		1,821			7,136
Cash and cash equivalents, beginning of period		4,374			3,505
Cash and cash equivalents, end of period	$	6,195		$	10,641

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 25, 2021 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 2021 filed with the Securities and Exchange Commission.

Note B ‑ Seasonal Aspects

The results of operations for the three and six month periods ended July 9, 2022 and July 10, 2021 are not necessarily indicative of the results to be expected for the full year.

Note C ‑ Inventories

In thousands	July 9, 2022		December 25, 2021		July 10, 2021
Raw materials	$	9,821	$	9,142	$	10,291
Work in progress		4,653		3,529		4,070
Finished goods		115,772		79,711		72,251
	$	130,246	$	92,382	$	86,612

Note D – Fair Values of Financial Instruments

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

Cash and Cash Equivalents

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

Long-term Debt

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

7

The following table presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall in accordance with FASB ASC 825 at July 9, 2022, December 25, 2021 and July 10, 2021.

			Fair Value Measurements Using
July 9, 2022	Carrying		Quoted Prices in Active Markets for Identical		Significant Other Observable Inputs		Significant Unobservable Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	6,195	$	6,195	$	--	$	--
Financial liabilities
Current portion of long-term debt	$	7,143	$	--	$	7,143	$	--
Long-term debt	$	94,040	$	--	$	94,040	$	--

			Fair Value Measurements Using
December 25, 2021	Carrying		Quoted Prices in Active Markets for Identical		Significant Other Observable Inputs		Significant Unobservable Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	4,374	$	4,374	$	--	$	--
Financial liabilities
Current portion of long-term debt	$	7,143	$	--	$	7,143	$	--
Long-term debt	$	50,396	$	--	$	50,396	$	--

			Fair Value Measurements Using
July 10, 2021	Carrying		Quoted Prices in Active Markets for Identical		Significant Other Observable Inputs		Significant Unobservable Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	10,641	$	10,641	$	--	$	--
Financial liabilities
Current portion of long-term debt	$	7,143	$	--	$	7,143	$	--
Long-term debt	$	42,857	$	--	$	42,857	$	--

Note E – Stock Compensation

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

During the six months ended July 9, 2022 and pursuant to the 2017 Incentive Plan, in lieu of cash payments of director fees, the Company awarded to certain directors 3,886 shares of common stock. During the six months ended July 9, 2022, the Company awarded 20,000 restricted stock units to directors and 196,254 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 2022 restricted stock units awarded to employees time vest over three years (one-third one year from grant, one-third two years from grant and one-third three years from grant) provided that the employee is still employed by the Company on the vesting date.

For the three and six months ended July 9, 2022, the Company recognized stock based compensation expense of $688 thousand and $1,076 thousand, respectively compared to stock based compensation expense of $326 thousand and $437 thousand for the same periods in the prior year. At July 9, 2022 and July 10, 2021, respectively, there was $2.6 million and $1.1 million in unrecognized stock-based compensation expense related to non-vested stock awards.

8

Note F ‑ Segment Information

	For the Three Months Ended July 9, 2022
In thousands	Sporting Goods		Corp.			Total
Revenues from external customers	$	94,337	$	--		$	94,337
Operating income (loss)		8,830		(641	)		8,189
Net income (loss)		5,737		(64	)		5,673

	As of and for the Six Months Ended July 9, 2022
In thousands	Sporting Goods		Corp.			Total
Revenues from external customers	$	166,717	$	--		$	166,717
Operating income (loss)		18,365		(1,153	)		17,212
Net income		12,278		49			12,327
Total assets	$	307,941	$	8,911		$	316,852

	For the Three Months Ended July 10, 2021
In thousands	Sporting Goods		Corp.			Total
Revenues from external customers	$	99,679	$	--		$	99,679
Operating income (loss)		11,367		(681	)		10,686
Net income		7,980		146			8,126

	As of and for the Six Months Ended July 10, 2021
In thousands	Sporting Goods		Corp.			Total
Revenues from external customers	$	158,870	$	--		$	158,870
Operating income (loss)		18,962		(1,147	)		17,815
Net income		13,342		226			13,568
Total assets	$	220,712	$	10,905		$	231,617

Note G – Dividend Payment

On June 7, 2022, the Company paid a quarterly dividend of $0.15 per common share to all shareholders of record on May 31, 2021. The total amount of the dividend was approximately $2.0 million and was charged against retained earnings.

On March 21, 2022, the Company paid a quarterly dividend of $0.15 per common share to all shareholders of record on March 14, 2022 (the amount was funded to the transfer agent by the Company on March 17, 2022). The total amount of the dividend was approximately $2.0 million and was charged against retained earnings.

9

Note H ‑ Earnings Per Share

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

	Three Months Ended				Six Months Ended
In thousands	July 9, 2022		July 10, 2021		July 9, 2022		July 10, 2021
Weighted average common shares outstanding		13,588		13,863		13,554		13,871
Dilutive effect of stock options and restricted stock units		55		93		62		91
Weighted average common shares outstanding, assuming dilution		13,643		13,956		13,616		13,962

Stock options that are anti-dilutive as to earnings per share and unvested restricted stock units which have a market condition for vesting that has not been achieved are ignored in the computation of dilutive earnings per share. The number of stock options and restricted stock units that were excluded in 2022 and 2021 were zero and 11,900, respectively.

Note I – New Accounting Standards and Changes in Accounting Principles

There have been no recent accounting pronouncements or changes in accounting pronouncements during the three and six months ended July 9, 2022, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2021, that are of significance, or potential significance to the Company.

Note J – Revenue from Contracts with Customers

Revenue Recognition – Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our goods at a point in time based on shipping terms and transfer of title. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Shipping and handling fees charged to customers are reported within revenue.

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

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

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

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

10

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

	Three Months Ended				Six Months Ended
All Amounts in Thousands	July 9, 2022		July 10, 2021		July 9, 2022		July 10, 2021
Gross Sales by Channel:
Mass Merchants	$	28,925	$	33,110	$	55,955	$	51,506
Specialty Dealers		28,990		31,617		54,333		54,177
E-commerce		38,495		39,711		61,351		60,937
International		4,531		4,196		8,611		6,923
Other		1,492		1,015		2,266		1,586
Total Gross Sales		102,433		109,649		182,516		175,129
Less: Gross-to-Net Sales Adjustments
Returns		678		2,633		2,848		4,248
Warranties		697		531		1,322		1,113
Customer Allowances		6,721		6,806		11,629		10,898
Total Gross-to-Net Sales Adjustments		8,096		9,970		15,799		16,259
Total Net Sales	$	94,337	$	99,679	$	166,717	$	158,870

Note K – Leases

We have operating leases for office, manufacturing and distribution facilities as well as for certain equipment. Our leases have remaining lease terms of 1 year to 10 years. As of July 9, 2022, the Company has not entered into any lease arrangements classified as a finance lease.

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

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

	Three Months Ended				Six Months Ended
All Amounts in Thousands	July 9, 2022		July 10, 2021		July 9, 2022		July 10, 2021
Lease Expense
Operating Lease Cost	$	342	$	407	$	680	$	718
Short-term Lease Cost		723		655		1,224		1,031
Variable Lease Cost		130		117		312		203
Total Operating Lease Cost	$	1,195	$	1,179	$	2,216	$	1,952
Operating Lease – Operating Cash Flows	$	309	$	361	$	612	$	616
New ROU Assets – Operating Leases	$	7,743	$	313	$	7,743	$	1,140

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

	Six Months Ended
All Amounts in Thousands	July 9, 2022			July 10, 2021
Weighted Average Remaining Lease Term – Operating Leases (in years)		9.47			1.66
Weighted Average Discount Rate – Operating Leases		5.00	%		5.00	%

Future minimum lease payments under non-cancellable leases as of July 9, 2022 were as follows:

All Amounts in Thousands
Year 1	$	253
Year 2		1,358
Year 3		1,306
Year 4		1,287
Year 5		1,276
Thereafter		6,464
Total future minimum lease payments		11,944
Less imputed interest		(2,608	)
Total	$	9,336
Reported as of July 9, 2022
Current operating lease liabilities		676
Long-term operating lease liabilities		8,660
Total	$	9,336

Note L – Commitments and Contingencies

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

Note M – Acquisition

On January 21, 2022, the Company completed its acquisition of the assets constituting the Brunswick Billiards business of Life Fitness, LLC. The purchase price of the acquisition is $35.8 million. The acquisition was funded by cash and the Company’s revolving credit facility. The Company has not yet finalized its final evaluation of the fair value of certain items. The current estimates of fair value for the more significant assets acquired and liabilities assumed were receivables ($1.3 million), inventory ($13.6 million), fixed assets, including building and land ($4.1 million), accounts payable ($3.2 million), other accrued liabilities ($2.5 million), goodwill and other intangible assets ($22.5 million).

Note N – Debt

On January 21, 2022, the Company entered into an Amended and Restated Credit Agreement (“Restated Credit Agreement”) with its issuing bank, JP Morgan Chase Bank, N.A. (“Chase”), and the other lenders identified in the Restated Credit Agreement (collectively, the “Lender”). Under the terms of the Restated Credit Agreement, Old National Bank has been added as a Lender. The Lenders have now made available to the Company a senior revolving credit facility with increased maximum availability of $65.0 million (the “Revolving Facility”), up from $50.0 million, plus an accordion feature that would allow borrowings up to $90.0 million under the Revolving Facility subject to certain terms and conditions. The maturity date of the revolving credit facility was extended to January 21, 2027. The Company may prepay the Revolving Facility, in whole or in part, and reborrow prior to the revolving loan maturity date. The Restated Credit Agreement further extended the maturity date for the term loan facility to January 21, 2027.

12

As of July 9, 2022, the outstanding principal amount of the term loan was $43.5 million and total amount drawn under the Revolving Facility was $57.7 million.

Note O – Subsequent Events

On July 18, 2022, the Company entered into the First Amendment to the Restated Credit Agreement. Under the terms of the First Amendment, the Lender increased the maximum availability under the senior revolving credit facility from $65.0 million to $75.0 million pursuant to the accordion feature in the Restated Credit Agreement. The First Amendment also adjusted the funded debt to EBITDA ratio financial covenant to 3:00 to 1:00 as of the end of the Company’s third and fourth fiscal quarters of 2022.

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: specific and overall impacts of the COVID-19 global pandemic on Escalade’s financial condition and results of operations; the impact of competitive products and pricing; product demand and market acceptance; new product development; Escalade’s ability to achieve its business objectives, especially with respect to its Sporting Goods business on which it has chosen to focus; Escalade’s ability to successfully achieve the anticipated results of strategic transactions, including the integration of the operations of acquired assets and businesses and of divestitures or discontinuances of certain operations, assets, brands, and products; the continuation and development of key customer, supplier, licensing and other business relationships; Escalade’s ability to develop and implement our own direct to consumer e-commerce distribution channel; Escalade’s ability to successfully negotiate the shifting retail environment and changes in consumer buying habits; the financial health of our customers; disruptions or delays in our business operations, including without limitation disruptions or delays in our supply chain, arising from political unrest, war, labor strikes, natural disasters, public health crises such as the coronavirus pandemic, and other events and circumstances beyond our control; Escalade’s ability to control costs; Escalade’s ability to successfully implement actions to lessen the potential impacts of tariffs and other trade restrictions applicable to our products and raw materials, including impacts on the costs of producing our goods, importing products and materials into our markets for sale, and on the pricing of our products; general economic conditions; fluctuation in operating results; changes in foreign currency exchange rates; changes in the securities markets; continued listing of the Company’s common stock on the NASDAQ Global Market; the Company’s inclusion or exclusion from certain market indices; Escalade’s ability to obtain financing and to maintain compliance with the terms of such financing; the availability, integration and effective operation of information systems and other technology, and the potential interruption of such systems or technology; risks related to data security of privacy breaches; the potential impact of actual or perceived defects in, or safety of, our products, including any impact of product recalls or legal or regulatory claims, proceedings or investigations involving our products; and other risks detailed from time to time in Escalade’s filings with the Securities and Exchange Commission. Escalade’s future financial performance could differ materially from the expectations of management contained herein. Escalade undertakes no obligation to release revisions to these forward-looking statements after the date of this report.

Overview

Escalade, Incorporated (Escalade, the Company, we, us or our) is focused on growing its Sporting Goods business through organic growth of existing categories, strategic acquisitions, and new product development. The Sporting Goods business competes in a variety of categories including basketball goals, archery, billiards, indoor and outdoor game recreation and fitness products. Strong brands and on-going investment in product development provide a solid foundation for building customer loyalty and continued growth.

Within the sporting goods industry, the Company has successfully built a robust market presence in several niche markets. This strategy is heavily dependent on expanding our customer base, barriers to entry, strong brands, excellent customer service and a commitment to innovation. A key strategic advantage is the Company’s established relationships with major customers that allow the Company to bring new products to market in a cost effective manner while maintaining a diversified portfolio of products to meet the demands of consumers. In addition to strategic customer relations, the Company has substantial manufacturing and import experience that enable it to be a low cost supplier.

To enhance growth opportunities, the Company has focused on promoting new product innovation and development and brand marketing. In addition, the Company has embarked on a strategy of acquiring companies or product lines that complement or expand the Company's existing product lines or provide expansion into new or emerging categories in sporting goods. A key objective is the acquisition of product lines with barriers to entry that the Company can take to market through its established distribution channels or through new market channels. Significant synergies are achieved through assimilation of acquired product lines into the existing Company structure. In January 2022, the Company completed its acquisition of the assets of the Brunswick Billiards® business, complementing its existing portfolio of billiards brands and other offerings in the Company’s indoor recreation market. The Company also sometimes divests or discontinues certain operations, assets, brands, and products that do not perform to the Company's expectations or no longer fit with the Company's strategic objectives.

Management believes that key indicators in measuring the success of these strategies are revenue growth, earnings growth, new product introductions, and the expansion of channels of distribution.

14

The Company continues to respond to the challenges and opportunities arising from the COVID-19 pandemic. Management cannot predict the full impact of the COVID-19 pandemic on the Company’s sales channels, supply chain, manufacturing and distribution nor to economic conditions generally, including the effects on consumer spending. The ultimate extent of the effects of the COVID-19 pandemic on the Company is highly uncertain and will depend on future developments, and such effects could exist for an extended period of time even after the pandemic ends. Due to the above circumstances and as described generally in this Form 10-Q, the Company’s results of operations for the period ended July 9, 2022 are not necessarily indicative of the results to be expected for fiscal year 2022.

Results of Operations

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

	Three Months Ended						Six Months Ended
	July 9, 2022			July 10, 2021			July 9, 2022			July 10, 2021
Net revenue		100.0	%		100.0	%		100.0	%		100.0	%
Cost of products sold		74.8	%		74.8	%		73.7	%		73.2	%
Gross margin		25.2	%		25.2	%		26.3	%		26.8	%
Selling, administrative and general expenses		15.6	%		13.9	%		15.1	%		14.9	%
Amortization		0.9	%		0.6	%		0.9	%		0.7	%
Operating income		8.7	%		10.7	%		10.3	%		11.2	%

Revenue and Gross Margin

Sales decreased by 5.4% for the second quarter of 2022, compared with the same period in the prior year. The decrease in sales was driven by timing of sales in basketball, lower demand in the fitness category and a reduction in outdoor category sales, including archery and water sports. For the first half of 2022, sales were up 4.9% compared to prior year.

The overall gross margin percentage remained flat at 25.2% for the second quarter of 2022 compared to 2021, despite continued challenges related to the global supply chain, raw materials cost inflation , and labor constraints.

Gross margin percentage decreased to 26.3% for the first six months of 2022, compared to 26.8% for the same period in the prior year.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (SG&A) were $14.7 million for the second quarter of 2022 compared to $13.8 million for the same period in the prior year, an increase of $0.9 million or 6.3%. SG&A as a percent of sales is 15.5% for the second quarter of 2022 compared with 13.9% for the same period in the prior year. For the first half of 2022, SG&A were $25.2 million compared to $23.7 million for the same period in 2021, an increase of $1.5 million or 6.4%. As a percent of sales, SG&A is 15.1% for the first half of 2022 compared with 14.9% for the same period in the prior year.

Provision for Income Taxes

The effective tax rate for the first half of 2022 was 21.9% compared to 21.3% for the same period last year.

Financial Condition and Liquidity

Total debt at the end of the first six months of 2022 was $101.2 million, an increase of $43.6 million from December 25, 2021. The increase in debt was largely driven by the funding of the Brunswick Billiards acquisition completed in January of 2022. The following schedule summarizes the Company’s total debt:

In thousands	July 9, 2022		December 25, 2021		July 10, 2021
Current portion of long-term debt	$	7,143	$	7,143	$	7,143
Long term debt		94,040		50,396		42,857
Total Debt	$	101,183	$	57,539	$	50,000

As a percentage of stockholders’ equity, total debt was 64.9%, 39.2% and 34.5% at July 9, 2022, December 25, 2021, and July 10, 2021, respectively.

15

On January 21, 2022, the Company entered into an Amended and Restated Credit Agreement (“Restated Credit Agreement”) with its issuing bank, JP Morgan Chase Bank, N.A. (“Chase”), and the other lenders identified in the Restated Credit Agreement (collectively, the “Lender”). Under the terms of the Restated Credit Agreement, Old National Bank has been added as a Lender. The Lenders have now made available to the Company a senior revolving credit facility with increased maximum availability of $65.0 million (the “Revolving Facility”), up from $50.0 million, plus an accordion feature that would allow borrowings up to $90.0 million under the Revolving Facility subject to certain terms and conditions. The maturity date of the revolving credit facility was extended to January 21, 2027. The Company may prepay the Revolving Facility, in whole or in part, and reborrow prior to the revolving loan maturity date. The Restated Credit Agreement further extended the maturity date for the term loan facility to January 21, 2027. As of July 9, 2022, the outstanding principal amount of the term loan was $43.5 million and total amount drawn under the Revolving Facility was $57.7 million.

Each loan bears interest at the Adjusted LIBO Rate for the interest period in effect plus the Applicable Rate. Applicable Rate means the applicable rate per annum set forth below, based upon Escalade’s Funded Debt to Adjusted Ratio as of the most recent determination date:

Funded Debt to EBITDA Ratio	Revolving Commitment ABR Spread			Revolving Commitment Term Benchmark Spread			Letter of Credit Fee			Commitment Fee Rate
Category 1		0.25	%		2.00	%		2.00	%		0.30	%
Greater than or equal to 2.50 to 1.0
Category 2		-0-			1.75	%		1.75	%		0.25	%
Greater than or equal to 1.50 to 1.0 but less than 2.50 to 1.0
Category 3		(0.25%	)		1.50	%		1.50	%		0.20	%
Less than 1.50 to 1.0

The Applicable Rate is determined as of the end of each quarter based upon the Company’s annual or quarterly consolidated financial statements and shall be effective during the period commencing the date of delivery to the agent.

In addition to the increased revolving borrowing amount and extended maturity dates, other significant changes reflected in the Restated Credit Agreement included: specifying that Indian’s acquisition of the assets of the Brunswick Billiards business is a permitted acquisition; providing a $7.5 million swingline commitment by Chase; replacing LIBOR with the replacement benchmark secured overnight financing rate as previously contemplated; and adjustments to certain financial covenants relating to the fixed charge coverage ratio. Escalade’s indebtedness under the Restated Credit Agreement continues to be collateralized by liens on all of the present and future equity of each of Escalade’s domestic subsidiaries and substantially all of the assets of the Company (excluding real estate). Each direct and indirect domestic subsidiary of Escalade and Indian has secured its guaranty of indebtedness incurred under the Revolving Facility with a first priority security interest and lien on all of such subsidiary’s assets. Escalade, Indian and all of the domestic subsidiaries entered into an Amended and Restated Pledge and Security Agreement dated January 21, 2022 in favor of the Lender to continue the existing liens, previously existing under the original pledge and security agreements entered into on April 30, 2009, as amended, and thereafter for subsidiaries created or acquired after that date. The obligations, guarantees, liens and other interests granted by Escalade, Indian, and their domestic subsidiaries continue in full force and effect.

On July 18, 2022, the Company entered into the First Amendment to the Restated Credit Agreement. Under the terms of the First Amendment, the Lender increased the maximum availability under the senior revolving credit facility from $65.0 million to $75.0 million pursuant to the accordion feature in the Restated Credit Agreement. The First Amendment also adjusted the funded debt to EBITDA ratio financial covenant to 3:00 to 1:00 as of the end of the Company’s third and fourth fiscal quarters of 2022.

The Company funds working capital requirements, shareholder dividends, and stock repurchases through operating cash flows and revolving credit agreements with its Lenders. The Company expects that cash generated from its 2022 operations and its access to adequate levels of revolving credit will provide it with sufficient cash flows for its operations and to meet growth needs.

Item 3.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Required.

16

Item 4.    CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

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

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

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 second quarter of 2022.

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 2022 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.

In addition to the other information set forth in this report, you should carefully consider the risks and uncertainties disclosed in our Annual Report on Form 10-K for the fiscal year ended December 25, 2021. These risks and uncertainties could materially and adversely affect our business, consolidated financial condition, results of operations, or cash flows. Our operations could also be affected by additional risks or uncertainties that are not presently known to us or that we currently do not consider material to our business. As of the date of this filing, except for the additional risk factor set forth below, there have been no material changes in our risk factors from those disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended December 25, 2021, which risk factors are incorporated herein by reference.

17

Our business involves the potential for product recalls, warranty liability, product liability, and other claims against us, which could adversely affect our reputation, earnings and financial condition.

As a manufacturer, marketer and distributor of consumer products, we are subject to the United States Consumer Products Safety Act of 1972, as amended by the Consumer Product Safety Improvement Act of 2008, which empowers the Consumer Products Safety Commission (“CPSC”) to recall or exclude from the market products that are found to be unsafe or hazardous. Although recalls of our products have been infrequent, in the first quarter of 2022, we voluntarily recalled our Ping Pong Avenger table tennis table due to concerns that it could create a potential fall risk to consumers. Notwithstanding that we extensively and rigorously test our products, there can be no assurance we will be able to detect, prevent, or fix all defects and safety concerns. Under certain circumstances, the CPSC could require us to repurchase or recall additional products, even if we disagree with the defect determination or have data that shows the actual safety risk to be nominal. Any repurchase or recall of our products, monetary judgment, fine or other penalty could be costly and damaging to our reputation and/or adversely affect our brands. Furthermore, the occurrence of any material defects in our products could expose us to liability for warranty claims in excess of our current reserves, and/or to product liability claims that could exceed the limits of our insurance coverage, to the extent coverage may exist. If our warranty reserves and/or insurance coverage are inadequate to cover future warranty claims and/or potential product liability claims, our financial condition and operating results may be harmed.

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
Share purchases prior to 3/19/2022 under the current repurchase program.		2,153,132	$	13.38		2,153,132	$	4,153,252
Second quarter purchases:
3/20/2022–4/16/2022	None		None		No Change		No Change
4/17/2022-5/14/2022	None		None		No Change		No Change
5/15/2022-6/11/2022	None		None		No Change		No Change
6/12/2022-7/9/2022	None		None		No Change		No Change
Total share purchases under the current program		2,153,132	$	13.38		2,153,132	$	4,153,252

The Company has one stock repurchase program which was established in February 2003 by the Board of Directors and which initially authorized management to expend up to $3,000,000 to repurchase shares on the open market as well as in private negotiated transactions. In February 2005, February 2006, August 2007 and February 2008 the Board of Directors increased the remaining balance on this plan to its original level of $3,000,000. In September 2019, the Board of Directors increased the stock repurchase program from $3,000,000 to $5,000,000. In December 2020, the Board of Directors increased the stock repurchase program to $15,000,000. From its inception date through July 9, 2022, the Company has repurchased 2,153,132 shares of its common stock under this repurchase program for an aggregate price of $28,812,686. The repurchase program has no termination date and there have been no share repurchases that were not part of a publicly announced program.

Item 3. DEFAULTS UPON SENIOR SECURITIES.

None.

Item 4. MINE SAFETY DISCLOSURES.

Not applicable.

Item 5. OTHER INFORMATION.

None.

18

Item 6. EXHIBITS

Number	Description
3.1	Articles of Incorporation of Escalade, Incorporated. Incorporated by reference from the Company’s 2007 First Quarter Report on Form 10-Q.
3.2	Amended By-laws of Escalade, Incorporated, as amended April 22, 2014. Incorporated by reference from the Company’s 2014 First Quarter Report on Form 10-Q.
10.1	First Amendment dated July 18, 2022 to the Amended and Restated Credit Agreement dated as of January 21, 2022 among Escalade, Incorporated, Indian Industries, Inc., each of their domestic subsidiaries, and JPMorgan Chase Bank, N.A., as Administrative Agent (without exhibits and schedules, which Escalade has determined are not material). Incorporated by reference from the Company’s Current Report on Form 8-K filed on July 21, 2022.
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	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
101.INS	Inline XBRL Instance Document
101.SCH	Inline XBRL Taxonomy Extension Schema Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

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:      August 4, 2022	/s/ Stephen R. Wawrin
	Vice President and Chief Financial Officer
	(On behalf of the registrant and in his
	capacities as Principal Financial Officer
	and Principal Accounting Officer)

19

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Walter P. Glazer, Jr., 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: August 4, 2022	/s/ Walter P. Glazer, Jr.
	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: August 4, 2022	/s/ Stephen R. Wawrin
	Vice President and Chief Financial Officer
	(On behalf of the registrant and in his
	capacities as Principal Financial Officer
	and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Escalade, Incorporated (the “Company”) on Form 10-Q for the period ended July 9, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Walter P. Glazer, Jr., 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/ Walter P. Glazer, Jr.

Chief Executive Officer

August 4, 2022

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Escalade, Incorporated (the “Company”) on Form 10-Q for the period ended July 9, 2022 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)

August 4, 2022

XML

Document And Entity Information - shares	6 Months Ended
	Jul. 09, 2022	Aug. 01, 2022
Document Information [Line Items]
Entity Central Index Key	0000033488
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2022
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jul. 09, 2022
Document Transition Report	false
Entity File Number	0-6966
Entity Registrant Name	ESCALADE, INCORPORATED
Entity Incorporation, State or Country Code	IN
Entity Tax Identification Number	13-2739290
Entity Address, Address Line One	817 Maxwell Ave
Entity Address, City or Town	Evansville
Entity Address, State or Province	IN
Entity Address, Postal Zip Code	47711
City Area Code	812
Local Phone Number	467-1358
Title of 12(b) Security	Common Stock, No Par Value
Trading Symbol	ESCA
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		13,590,407

XML

Consolidated Condensed Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Jul. 09, 2022	Dec. 25, 2021	Jul. 10, 2021
Current Assets:
Cash and cash equivalents	$ 6,195	$ 4,374	$ 10,641
Receivables, less allowance of $726; $457; and $717; respectively	60,011	65,991	52,248
Inventories	130,246	92,382	86,612
Prepaid expenses	7,263	7,569	4,775
Prepaid income tax	621	739
TOTAL CURRENT ASSETS	204,336	171,055	154,276
Property, plant and equipment, net	28,344	24,936	20,792
Operating lease right-of-use assets	9,318	2,210	2,079
Intangible assets, net	35,353	20,778	21,638
Goodwill	39,226	32,695	32,695
Other assets	275	124	137
TOTAL ASSETS	316,852	251,798	231,617
Current Liabilities:
Current portion of long-term debt	7,143	7,143	7,143
Trade accounts payable	24,650	15,847	14,705
Accrued liabilities	20,483	24,385	14,875
Income tax payable	0	0	180
Current operating lease liabilities	676	818	1,526
TOTAL CURRENT LIABILITIES	52,952	48,193	38,429
Other Liabilities:
Long‑term debt	94,040	50,396	42,857
Deferred income tax liability	4,759	4,759	4,193
Operating lease liabilities	8,660	1,387	557
Other liabilities	448	448	448
TOTAL LIABILITIES	160,859	105,183	86,484
Stockholders' Equity:
Authorized 30,000,000 shares; no par value, issued and outstanding – 13,590,407; 13,493,332; and 13,779,489; shares respectively	13,590	13,493	13,779
Retained earnings	142,403	133,122	131,354
TOTAL STOCKHOLDERS' EQUITY	155,993	146,615	145,133
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 316,852	$ 251,798	$ 231,617

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Consolidated Condensed Balance Sheets (Current Period Unaudited)-parentheticals (Parentheticals) - USD ($) $ / shares in Thousands, $ in Thousands	Jul. 09, 2022	Dec. 25, 2021	Jul. 10, 2021
Receivables, allowance	$ 726	$ 457	$ 717
Preferred stock, shares authorized (in shares)	1,000,000	1,000,000	1,000,000
Preferred Stock, Par or Stated Value Per Share (in dollars per share)	$ 0	$ 0	$ 0
Preferred Stock, Shares Issued (in shares)	0	0	0
Common stock, shares authorized (in shares)	30,000,000	30,000,000	30,000,000
Common stock, shares issued (in shares)	13,590,407	13,493,332	13,779,489
Common stock, shares outstanding (in shares)	13,590,407	13,493,332	13,779,489

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Consolidated Condensed Statements of Operations (Unaudited) - USD ($) $ in Thousands	4 Months Ended		6 Months Ended
	Jul. 09, 2022	Jul. 10, 2021	Jul. 09, 2022	Jul. 10, 2021
Net sales	$ 94,337	$ 99,679	$ 166,717	$ 158,870
Costs and Expenses
Cost of products sold	70,613	74,606	122,874	116,363
Selling, administrative and general expenses	14,680	13,810	25,206	23,686
Amortization	855	577	1,425	1,006
Operating Income	8,189	10,686	17,212	17,815
Other Income (Expense)
Interest expense	(948)	(387)	(1,508)	(621)
Other income	29	21	72	56
Income Before Income Taxes	7,270	10,320	15,776	17,250
Provision for Income Taxes	1,597	2,194	3,449	3,682
Net Income	$ 5,673	$ 8,126	$ 12,327	$ 13,568
Earnings Per Share Data:
Basic earnings per share (in dollars per share)	$ 0.42	$ 0.59	$ 0.91	$ 0.98
Diluted earnings per share (in dollars per share)	0.42	0.58	0.91	0.97
Dividends declared (in dollars per share)	$ 0.15	$ 0.14	$ 0.30	$ 0.28

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Consolidated Condensed Statement of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Retained Earnings [Member]	Total
Balances (in shares) at Dec. 26, 2020	13,919
Balances at Dec. 26, 2020	$ 13,919	$ 125,237	$ 139,156
Net income		13,568	13,568
Expense of stock options and restricted stock units		437	437
Settlement of restricted stock units (in shares)	46
Settlement of restricted stock units	$ 46	(46)
Dividends declared		(3,887)	(3,887)
Purchase of stock (in shares)	(202)
Purchase of stock	$ (202)	(4,218)	(4,420)
Stock issued to directors as compensation (in shares)	6
Stock issued to directors as compensation	$ 6	129	135
Exercise of stock options (in shares)	10
Exercise of stock options	$ 10	134	144
Balances (in shares) at Jul. 10, 2021	13,779
Balances at Jul. 10, 2021	$ 13,779	131,354	145,133
Balances (in shares) at Mar. 20, 2021	13,925
Balances at Mar. 20, 2021	$ 13,925	127,975	141,900
Net income		8,126	8,126
Expense of stock options and restricted stock units		326	326
Settlement of restricted stock units (in shares)	1
Settlement of restricted stock units	$ 1	(1)
Dividends declared		(1,937)	(1,937)
Purchase of stock (in shares)	(153)
Purchase of stock	$ (153)	(3,264)	(3,417)
Stock issued to directors as compensation (in shares)	6
Stock issued to directors as compensation	$ 6	129	135
Balances (in shares) at Jul. 10, 2021	13,779
Balances at Jul. 10, 2021	$ 13,779	131,354	145,133
Balances (in shares) at Dec. 25, 2021	13,493
Balances at Dec. 25, 2021	$ 13,493	133,122	146,615
Net income		12,327	12,327
Expense of stock options and restricted stock units		1,076	1,076
Settlement of restricted stock units (in shares)	93
Settlement of restricted stock units	$ 93	(93)
Dividends declared		(4,076)	(4,076)
Stock issued to directors as compensation (in shares)	4
Stock issued to directors as compensation	$ 4	47	51
Balances (in shares) at Jul. 09, 2022	13,590
Balances at Jul. 09, 2022	$ 13,590	142,403	155,993
Balances (in shares) at Mar. 19, 2022	13,585
Balances at Mar. 19, 2022	$ 13,585	138,034	151,619
Net income		5,673	5,673
Expense of stock options and restricted stock units		688	688
Settlement of restricted stock units (in shares)	1
Settlement of restricted stock units	$ 1	(1)
Dividends declared		(2,038)	(2,038)
Stock issued to directors as compensation (in shares)	4
Stock issued to directors as compensation	$ 4	47	51
Balances (in shares) at Jul. 09, 2022	13,590
Balances at Jul. 09, 2022	$ 13,590	$ 142,403	$ 155,993

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Consolidated Condensed Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jul. 09, 2022	Jul. 10, 2021
Operating Activities:
Net income	$ 12,327	$ 13,568
Depreciation and amortization	3,603	2,709
Provision for doubtful accounts	258	(152)
Stock-based compensation	1,076	437
Gain on disposal of property and equipment		(26)
Adjustments necessary to reconcile net income to net cash used by operating activities	(17,589)	(17,030)
Net cash used by operating activities	(325)	(494)
Investing Activities:
Purchase of property and equipment	(1,536)	(4,278)
Proceeds from sale of property and equipment		42
Acquisitions	(35,757)
Net cash used by investing activities	(37,293)	(4,236)
Financing Activities:
Proceeds from issuance of long-term debt	124,571	162,666
Payments on long-term debt	(80,927)	(142,739)
Proceeds from exercise of stock options		144
Purchase of stock		(4,420)
Director stock compensation	51	135
Deferred financing fees	(180)	(33)
Cash dividends paid	(4,076)	(3,887)
Net cash provided by financing activities	39,439	11,866
Net increase in cash and cash equivalents	1,821	7,136
Cash and cash equivalents, beginning of period	4,374	3,505
Cash and cash equivalents, end of period	$ 6,195	$ 10,641

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Note A - Summary of Significant Accounting Policies

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

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 25, 2021 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 2021 filed with the Securities and Exchange Commission.

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Note B - Seasonal Aspects

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

Seasonal Aspects [Text Block]

Note B ‑ Seasonal Aspects

The results of operations for the three and six month periods ended July 9, 2022 and July 10, 2021 are not necessarily indicative of the results to be expected for the full year.

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Note C - Inventories

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

Inventory Disclosure [Text Block]

Note C ‑ Inventories

In thousands	July 9, 2022		December 25, 2021		July 10, 2021
Raw materials	$	9,821	$	9,142	$	10,291
Work in progress		4,653		3,529		4,070
Finished goods		115,772		79,711		72,251
	$	130,246	$	92,382	$	86,612

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Note D - Fair Values of Financial Instruments

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

Fair Value Disclosures [Text Block]

Note D – Fair Values of Financial Instruments

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

Cash and Cash Equivalents

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

Long-term Debt

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

The following table presents estimated fair values of the Company’s financial instruments and the level within the fair value hierarchy in which the fair value measurements fall in accordance with FASB ASC 825 at July 9, 2022, December 25, 2021 and July 10, 2021.

			Fair Value Measurements Using
July 9, 2022	Carrying		Quoted Prices in Active Markets for Identical		Significant Other Observable Inputs		Significant Unobservable Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	6,195	$	6,195	$	--	$	--
Financial liabilities
Current portion of long-term debt	$	7,143	$	--	$	7,143	$	--
Long-term debt	$	94,040	$	--	$	94,040	$	--

			Fair Value Measurements Using
December 25, 2021	Carrying		Quoted Prices in Active Markets for Identical		Significant Other Observable Inputs		Significant Unobservable Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	4,374	$	4,374	$	--	$	--
Financial liabilities
Current portion of long-term debt	$	7,143	$	--	$	7,143	$	--
Long-term debt	$	50,396	$	--	$	50,396	$	--

			Fair Value Measurements Using
July 10, 2021	Carrying		Quoted Prices in Active Markets for Identical		Significant Other Observable Inputs		Significant Unobservable Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	10,641	$	10,641	$	--	$	--
Financial liabilities
Current portion of long-term debt	$	7,143	$	--	$	7,143	$	--
Long-term debt	$	42,857	$	--	$	42,857	$	--

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Note E - Stock Compensation

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note E – Stock Compensation

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

During the six months ended July 9, 2022 and pursuant to the 2017 Incentive Plan, in lieu of cash payments of director fees, the Company awarded to certain directors 3,886 shares of common stock. During the six months ended July 9, 2022, the Company awarded 20,000 restricted stock units to directors and 196,254 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 2022 restricted stock units awarded to employees time vest over three years (one-third one year from grant, one-third two years from grant and one-third three years from grant) provided that the employee is still employed by the Company on the vesting date.

For the three and six months ended July 9, 2022, the Company recognized stock based compensation expense of $688 thousand and $1,076 thousand, respectively compared to stock based compensation expense of $326 thousand and $437 thousand for the same periods in the prior year. At July 9, 2022 and July 10, 2021, respectively, there was $2.6 million and $1.1 million in unrecognized stock-based compensation expense related to non-vested stock awards.

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Note F - Segment Information

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

Segment Reporting Disclosure [Text Block]

Note F ‑ Segment Information

	For the Three Months Ended July 9, 2022
In thousands	Sporting Goods		Corp.			Total
Revenues from external customers	$	94,337	$	--		$	94,337
Operating income (loss)		8,830		(641	)		8,189
Net income (loss)		5,737		(64	)		5,673

	As of and for the Six Months Ended July 9, 2022
In thousands	Sporting Goods		Corp.			Total
Revenues from external customers	$	166,717	$	--		$	166,717
Operating income (loss)		18,365		(1,153	)		17,212
Net income		12,278		49			12,327
Total assets	$	307,941	$	8,911		$	316,852

	For the Three Months Ended July 10, 2021
In thousands	Sporting Goods		Corp.			Total
Revenues from external customers	$	99,679	$	--		$	99,679
Operating income (loss)		11,367		(681	)		10,686
Net income		7,980		146			8,126

	As of and for the Six Months Ended July 10, 2021
In thousands	Sporting Goods		Corp.			Total
Revenues from external customers	$	158,870	$	--		$	158,870
Operating income (loss)		18,962		(1,147	)		17,815
Net income		13,342		226			13,568
Total assets	$	220,712	$	10,905		$	231,617

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Note G - Dividend Payment

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

Dividend Payment Terms [Text Block]

Note G – Dividend Payment

On June 7, 2022, the Company paid a quarterly dividend of $0.15 per common share to all shareholders of record on May 31, 2021. The total amount of the dividend was approximately $2.0 million and was charged against retained earnings.

On March 21, 2022, the Company paid a quarterly dividend of $0.15 per common share to all shareholders of record on March 14, 2022 (the amount was funded to the transfer agent by the Company on March 17, 2022). The total amount of the dividend was approximately $2.0 million and was charged against retained earnings.

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Note H - Earnings Per Share

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

Earnings Per Share [Text Block]

Note H ‑ Earnings Per Share

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

	Three Months Ended				Six Months Ended
In thousands	July 9, 2022		July 10, 2021		July 9, 2022		July 10, 2021
Weighted average common shares outstanding		13,588		13,863		13,554		13,871
Dilutive effect of stock options and restricted stock units		55		93		62		91
Weighted average common shares outstanding, assuming dilution		13,643		13,956		13,616		13,962

Stock options that are anti-dilutive as to earnings per share and unvested restricted stock units which have a market condition for vesting that has not been achieved are ignored in the computation of dilutive earnings per share. The number of stock options and restricted stock units that were excluded in 2022 and 2021 were zero and 11,900, respectively.

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Note I - New Accounting Standards and Changes in Accounting Principles

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

Accounting Standards Update and Change in Accounting Principle [Text Block]

Note I – New Accounting Standards and Changes in Accounting Principles

There have been no recent accounting pronouncements or changes in accounting pronouncements during the three and six months ended July 9, 2022, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 25, 2021, that are of significance, or potential significance to the Company.

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Note J - Revenue From Contracts With Customers

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

Revenue from Contract with Customer [Text Block]

Note J – Revenue from Contracts with Customers

Revenue Recognition – Revenue is recognized when obligations under the terms of a contract with our customer are satisfied; generally this occurs with the transfer of control of our goods at a point in time based on shipping terms and transfer of title. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Shipping and handling fees charged to customers are reported within revenue.

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

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

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

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

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

	Three Months Ended				Six Months Ended
All Amounts in Thousands	July 9, 2022		July 10, 2021		July 9, 2022		July 10, 2021
Gross Sales by Channel:
Mass Merchants	$	28,925	$	33,110	$	55,955	$	51,506
Specialty Dealers		28,990		31,617		54,333		54,177
E-commerce		38,495		39,711		61,351		60,937
International		4,531		4,196		8,611		6,923
Other		1,492		1,015		2,266		1,586
Total Gross Sales		102,433		109,649		182,516		175,129
Less: Gross-to-Net Sales Adjustments
Returns		678		2,633		2,848		4,248
Warranties		697		531		1,322		1,113
Customer Allowances		6,721		6,806		11,629		10,898
Total Gross-to-Net Sales Adjustments		8,096		9,970		15,799		16,259
Total Net Sales	$	94,337	$	99,679	$	166,717	$	158,870

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Note K - Leases

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

Lessee, Operating Leases [Text Block]

Note K – Leases

We have operating leases for office, manufacturing and distribution facilities as well as for certain equipment. Our leases have remaining lease terms of 1 year to 10 years. As of July 9, 2022, the Company has not entered into any lease arrangements classified as a finance lease.

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

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

	Three Months Ended				Six Months Ended
All Amounts in Thousands	July 9, 2022		July 10, 2021		July 9, 2022		July 10, 2021
Lease Expense
Operating Lease Cost	$	342	$	407	$	680	$	718
Short-term Lease Cost		723		655		1,224		1,031
Variable Lease Cost		130		117		312		203
Total Operating Lease Cost	$	1,195	$	1,179	$	2,216	$	1,952
Operating Lease – Operating Cash Flows	$	309	$	361	$	612	$	616
New ROU Assets – Operating Leases	$	7,743	$	313	$	7,743	$	1,140

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

	Six Months Ended
All Amounts in Thousands	July 9, 2022			July 10, 2021
Weighted Average Remaining Lease Term – Operating Leases (in years)		9.47			1.66
Weighted Average Discount Rate – Operating Leases		5.00	%		5.00	%

Future minimum lease payments under non-cancellable leases as of July 9, 2022 were as follows:

All Amounts in Thousands
Year 1	$	253
Year 2		1,358
Year 3		1,306
Year 4		1,287
Year 5		1,276
Thereafter		6,464
Total future minimum lease payments		11,944
Less imputed interest		(2,608	)
Total	$	9,336
Reported as of July 9, 2022
Current operating lease liabilities		676
Long-term operating lease liabilities		8,660
Total	$	9,336

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Note L - Commitments and Contingencies

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

Note L – Commitments and Contingencies

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

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Note M - Acquisition

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

Business Combination Disclosure [Text Block]

Note M – Acquisition

On January 21, 2022, the Company completed its acquisition of the assets constituting the Brunswick Billiards business of Life Fitness, LLC. The purchase price of the acquisition is $35.8 million. The acquisition was funded by cash and the Company’s revolving credit facility. The Company has not yet finalized its final evaluation of the fair value of certain items. The current estimates of fair value for the more significant assets acquired and liabilities assumed were receivables ($1.3 million), inventory ($13.6 million), fixed assets, including building and land ($4.1 million), accounts payable ($3.2 million), other accrued liabilities ($2.5 million), goodwill and other intangible assets ($22.5 million).

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Note N - Debt

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

Debt Disclosure [Text Block]

Note N – Debt

On January 21, 2022, the Company entered into an Amended and Restated Credit Agreement (“Restated Credit Agreement”) with its issuing bank, JP Morgan Chase Bank, N.A. (“Chase”), and the other lenders identified in the Restated Credit Agreement (collectively, the “Lender”). Under the terms of the Restated Credit Agreement, Old National Bank has been added as a Lender. The Lenders have now made available to the Company a senior revolving credit facility with increased maximum availability of $65.0 million (the “Revolving Facility”), up from $50.0 million, plus an accordion feature that would allow borrowings up to $90.0 million under the Revolving Facility subject to certain terms and conditions. The maturity date of the revolving credit facility was extended to January 21, 2027. The Company may prepay the Revolving Facility, in whole or in part, and reborrow prior to the revolving loan maturity date. The Restated Credit Agreement further extended the maturity date for the term loan facility to January 21, 2027.

As of July 9, 2022, the outstanding principal amount of the term loan was $43.5 million and total amount drawn under the Revolving Facility was $57.7 million.

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Note O - Subsequent Events

6 Months Ended

Jul. 09, 2022

Notes to Financial Statements

Subsequent Events [Text Block]

Note O – Subsequent Events

On July 18, 2022, the Company entered into the First Amendment to the Restated Credit Agreement. Under the terms of the First Amendment, the Lender increased the maximum availability under the senior revolving credit facility from $65.0 million to $75.0 million pursuant to the accordion feature in the Restated Credit Agreement. The First Amendment also adjusted the funded debt to EBITDA ratio financial covenant to 3:00 to 1:00 as of the end of the Company’s third and fourth fiscal quarters of 2022.

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Significant Accounting Policies (Policies)	6 Months Ended
	Jul. 09, 2022
Accounting Policies [Abstract]
Consolidation, Policy [Policy Text Block]	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 25, 2021 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 2021 filed with the Securities and Exchange Commission.

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Note C - Inventories (Tables)

6 Months Ended

Jul. 09, 2022

Notes Tables

Schedule of Inventory, Current [Table Text Block]

In thousands	July 9, 2022		December 25, 2021		July 10, 2021
Raw materials	$	9,821	$	9,142	$	10,291
Work in progress		4,653		3,529		4,070
Finished goods		115,772		79,711		72,251
	$	130,246	$	92,382	$	86,612

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Note D - Fair Values of Financial Instruments (Tables)

6 Months Ended

Jul. 09, 2022

Notes Tables

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

			Fair Value Measurements Using
July 9, 2022	Carrying		Quoted Prices in Active Markets for Identical		Significant Other Observable Inputs		Significant Unobservable Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	6,195	$	6,195	$	--	$	--
Financial liabilities
Current portion of long-term debt	$	7,143	$	--	$	7,143	$	--
Long-term debt	$	94,040	$	--	$	94,040	$	--

			Fair Value Measurements Using
December 25, 2021	Carrying		Quoted Prices in Active Markets for Identical		Significant Other Observable Inputs		Significant Unobservable Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	4,374	$	4,374	$	--	$	--
Financial liabilities
Current portion of long-term debt	$	7,143	$	--	$	7,143	$	--
Long-term debt	$	50,396	$	--	$	50,396	$	--

			Fair Value Measurements Using
July 10, 2021	Carrying		Quoted Prices in Active Markets for Identical		Significant Other Observable Inputs		Significant Unobservable Inputs
In thousands	Amount		Assets (Level 1)		(Level 2)		(Level 3)
Financial assets
Cash and cash equivalents	$	10,641	$	10,641	$	--	$	--
Financial liabilities
Current portion of long-term debt	$	7,143	$	--	$	7,143	$	--
Long-term debt	$	42,857	$	--	$	42,857	$	--

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Note F - Segment Information (Tables)

6 Months Ended

Jul. 09, 2022

Notes Tables

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

	For the Three Months Ended July 9, 2022
In thousands	Sporting Goods		Corp.			Total
Revenues from external customers	$	94,337	$	--		$	94,337
Operating income (loss)		8,830		(641	)		8,189
Net income (loss)		5,737		(64	)		5,673

	As of and for the Six Months Ended July 9, 2022
In thousands	Sporting Goods		Corp.			Total
Revenues from external customers	$	166,717	$	--		$	166,717
Operating income (loss)		18,365		(1,153	)		17,212
Net income		12,278		49			12,327
Total assets	$	307,941	$	8,911		$	316,852

	For the Three Months Ended July 10, 2021
In thousands	Sporting Goods		Corp.			Total
Revenues from external customers	$	99,679	$	--		$	99,679
Operating income (loss)		11,367		(681	)		10,686
Net income		7,980		146			8,126

	As of and for the Six Months Ended July 10, 2021
In thousands	Sporting Goods		Corp.			Total
Revenues from external customers	$	158,870	$	--		$	158,870
Operating income (loss)		18,962		(1,147	)		17,815
Net income		13,342		226			13,568
Total assets	$	220,712	$	10,905		$	231,617

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Note H - Earnings Per Share (Tables)

6 Months Ended

Jul. 09, 2022

Notes Tables

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

	Three Months Ended				Six Months Ended
In thousands	July 9, 2022		July 10, 2021		July 9, 2022		July 10, 2021
Weighted average common shares outstanding		13,588		13,863		13,554		13,871
Dilutive effect of stock options and restricted stock units		55		93		62		91
Weighted average common shares outstanding, assuming dilution		13,643		13,956		13,616		13,962

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Note J - Revenue From Contracts With Customers (Tables)

6 Months Ended

Jul. 09, 2022

Notes Tables

Disaggregation of Revenue [Table Text Block]

	Three Months Ended				Six Months Ended
All Amounts in Thousands	July 9, 2022		July 10, 2021		July 9, 2022		July 10, 2021
Gross Sales by Channel:
Mass Merchants	$	28,925	$	33,110	$	55,955	$	51,506
Specialty Dealers		28,990		31,617		54,333		54,177
E-commerce		38,495		39,711		61,351		60,937
International		4,531		4,196		8,611		6,923
Other		1,492		1,015		2,266		1,586
Total Gross Sales		102,433		109,649		182,516		175,129
Less: Gross-to-Net Sales Adjustments
Returns		678		2,633		2,848		4,248
Warranties		697		531		1,322		1,113
Customer Allowances		6,721		6,806		11,629		10,898
Total Gross-to-Net Sales Adjustments		8,096		9,970		15,799		16,259
Total Net Sales	$	94,337	$	99,679	$	166,717	$	158,870

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Note K - Leases (Tables)

6 Months Ended

Jul. 09, 2022

Notes Tables

Lease, Cost [Table Text Block]

	Three Months Ended				Six Months Ended
All Amounts in Thousands	July 9, 2022		July 10, 2021		July 9, 2022		July 10, 2021
Lease Expense
Operating Lease Cost	$	342	$	407	$	680	$	718
Short-term Lease Cost		723		655		1,224		1,031
Variable Lease Cost		130		117		312		203
Total Operating Lease Cost	$	1,195	$	1,179	$	2,216	$	1,952
Operating Lease – Operating Cash Flows	$	309	$	361	$	612	$	616
New ROU Assets – Operating Leases	$	7,743	$	313	$	7,743	$	1,140

	Six Months Ended
All Amounts in Thousands	July 9, 2022			July 10, 2021
Weighted Average Remaining Lease Term – Operating Leases (in years)		9.47			1.66
Weighted Average Discount Rate – Operating Leases		5.00	%		5.00	%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

All Amounts in Thousands
Year 1	$	253
Year 2		1,358
Year 3		1,306
Year 4		1,287
Year 5		1,276
Thereafter		6,464
Total future minimum lease payments		11,944
Less imputed interest		(2,608	)
Total	$	9,336
Reported as of July 9, 2022
Current operating lease liabilities		676
Long-term operating lease liabilities		8,660
Total	$	9,336

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Note C - Inventories - Inventories (Details) - USD ($) $ in Thousands	Jul. 09, 2022	Dec. 25, 2021	Jul. 10, 2021
Raw materials	$ 9,821	$ 9,142	$ 10,291
Work in progress	4,653	3,529	4,070
Finished goods	115,772	79,711	72,251
Inventory, Net, Total	$ 130,246	$ 92,382	$ 86,612

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Note D - Fair Values of Financial Instruments - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Jul. 09, 2022	Dec. 25, 2021	Jul. 10, 2021
Cash and cash equivalents	$ 6,195	$ 4,374	$ 10,641
Current portion of long-term debt	7,143	7,143	7,143
Long-term debt	94,040	50,396	42,857
Fair Value, Inputs, Level 1 [Member]
Cash and cash equivalents	6,195	4,374	10,641
Fair Value, Inputs, Level 2 [Member]
Current portion of long-term debt	7,143	7,143	7,143
Long-term debt	$ 94,040	$ 50,396	$ 42,857

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Note E - Stock Compensation (Details Textual) - USD ($) $ in Thousands	4 Months Ended		6 Months Ended
	Jul. 09, 2022	Jul. 10, 2021	Jul. 09, 2022	Jul. 10, 2021
Share-Based Payment Arrangement, Expense	$ 688	$ 326	$ 1,076	$ 437
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Amount, Total	$ 2,600	$ 1,100	$ 2,600	$ 1,100
Restricted Stock Units (RSUs) [Member] | Share-Based Payment Arrangement, Employee [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)			196,254
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)			3 years
Restricted Stock Units (RSUs) [Member] | Share-Based Payment Arrangement, Employee [Member] | Share-Based Payment Arrangement, Tranche One [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage			33.33%
Restricted Stock Units (RSUs) [Member] | Share-Based Payment Arrangement, Employee [Member] | Share-Based Payment Arrangement, Tranche Two [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage			33.33%
Restricted Stock Units (RSUs) [Member] | Share-Based Payment Arrangement, Employee [Member] | Share-Based Payment Arrangement, Tranche Three [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage			33.33%
Restricted Stock Units (RSUs) [Member] | Director [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Equity Instruments Other than Options, Grants in Period (in shares)			20,000
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Period (Year)			2 years
Restricted Stock Units (RSUs) [Member] | Director [Member] | Share-Based Payment Arrangement, Tranche One [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage			50.00%
Restricted Stock Units (RSUs) [Member] | Director [Member] | Share-Based Payment Arrangement, Tranche Two [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Award Vesting Rights, Percentage			50.00%
Incentive Plan 2017 [Member]
Shares Issued, Shares, Share-Based Payment Arrangement, before Forfeiture (in shares)			3,886

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Note F - Segment Information - Segment Information (Details) - USD ($) $ in Thousands	4 Months Ended		6 Months Ended
	Jul. 09, 2022	Jul. 10, 2021	Jul. 09, 2022	Jul. 10, 2021	Dec. 25, 2021
Revenues from external customers	$ 94,337	$ 99,679	$ 166,717	$ 158,870
Operating income (loss)	8,189	10,686	17,212	17,815
Net income (loss)	5,673	8,126	12,327	13,568
Total assets	316,852	231,617	316,852	231,617	$ 251,798
Sporting Goods [Member]
Revenues from external customers	94,337	99,679	166,717	158,870
Operating income (loss)	8,830	11,367	18,365	18,962
Net income (loss)	5,737	7,980	12,278	13,342
Total assets	307,941	220,712	307,941	220,712
Corporate Segment [Member]
Revenues from external customers	0	0	0	0
Operating income (loss)	(641)	(681)	(1,153)	(1,147)
Net income (loss)	(64)	146	49	226
Total assets	$ 8,911	$ 10,905	$ 8,911	$ 10,905

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Note G - Dividend Payment (Details Textual) - USD ($) $ / shares in Units, $ in Thousands			4 Months Ended		6 Months Ended
	Jun. 07, 2022	Mar. 21, 2021	Jul. 09, 2022	Jul. 10, 2021	Jul. 09, 2022	Jul. 10, 2021
Common Stock, Dividends, Per Share, Cash Paid (in dollars per share)	$ 0.15	$ 0.15
Dividends, Common Stock, Cash	$ 2,000	$ 2,000	$ 2,038	$ 1,937	$ 4,076	$ 3,887

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Note H - Earnings Per Share (Details Textual) - shares	6 Months Ended
	Jul. 09, 2022	Jul. 10, 2021
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount (in shares)	0	11,900

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Note H - Earnings Per Share - Earnings Per Share (Details) - shares shares in Thousands	4 Months Ended		6 Months Ended
	Jul. 09, 2022	Jul. 10, 2021	Jul. 09, 2022	Jul. 10, 2021
Weighted average common shares outstanding (in shares)	13,588	13,863	13,554	13,871
Dilutive effect of stock options and restricted stock units (in shares)	55	93	62	91
Weighted average common shares outstanding, assuming dilution (in shares)	13,643	13,956	13,616	13,962

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Note J - Revenue from Contracts with Customers - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	4 Months Ended		6 Months Ended
	Jul. 09, 2022	Jul. 10, 2021	Jul. 09, 2022	Jul. 10, 2021
Gross Sales	$ 102,433	$ 109,649	$ 182,516	$ 175,129
Returns	678	2,633	2,848	4,248
Warranties	697	531	1,322	1,113
Customer Allowances	6,721	6,806	11,629	10,898
Total Gross-to-Net Sales Adjustments	8,096	9,970	15,799	16,259
Total Net Sales	94,337	99,679	166,717	158,870
Mass Merchants [Member]
Gross Sales	28,925	33,110	55,955	51,506
Specialty Dealers [Member]
Gross Sales	28,990	31,617	54,333	54,177
E-commerce [Member]
Gross Sales	38,495	39,711	61,351	60,937
International [Member]
Gross Sales	4,531	4,196	8,611	6,923
Other Channels [Member]
Gross Sales	$ 1,492	$ 1,015	$ 2,266	$ 1,586

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Note K - Leases - Lease Cost (Details) - USD ($) $ in Thousands	4 Months Ended		6 Months Ended
	Jul. 09, 2022	Jul. 10, 2021	Jul. 09, 2022	Jul. 10, 2021
Operating Lease Cost	$ 342	$ 407	$ 680	$ 718
Short-term Lease Cost	723	655	1,224	1,031
Variable Lease Cost	130	117	312	203
Total Operating Lease Cost	1,195	1,179	2,216	1,952
Operating Lease – Operating Cash Flows	309	361	612	616
New ROU Assets – Operating Leases	$ 7,743	$ 313	$ 7,743	$ 1,140
Weighted Average Remaining Lease Term – Operating Leases (in years) (Year)	9 years 5 months 19 days	1 year 7 months 28 days	9 years 5 months 19 days	1 year 7 months 28 days
Weighted Average Discount Rate – Operating Leases	5.00%	5.00%	5.00%	5.00%

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Note K - Leases - Future Minimum Lease Payments (Details) - USD ($) $ in Thousands	Jul. 09, 2022	Dec. 25, 2021	Jul. 10, 2021
Year 1	$ 253
Year 2	1,358
Year 3	1,306
Year 4	1,287
Year 5	1,276
Thereafter	6,464
Total future minimum lease payments	11,944
Less imputed interest	(2,608)
Total	9,336
Current operating lease liabilities	676	$ 818	$ 1,526
Operating lease liabilities	8,660	$ 1,387	$ 557
Total	$ 9,336

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Note M - Acquisition (Details Textual) - Life Fitness LLC [Member] $ in Millions	6 Months Ended
	Jul. 09, 2022 USD ($)
Business Combination, Consideration Transferred, Total	$ 35.8
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables	1.3
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory	13.6
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment, Total	4.1
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable	3.2
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Other	2.5
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill, Total	$ 22.5

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Note N - Debt (Details Textual) - USD ($) $ in Millions	Jul. 09, 2022	Jan. 21, 2022	Dec. 25, 2021
Term Loan [Member]
Long-Term Debt, Gross	$ 43.5
Restated Credit Agreement [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 65.0	$ 50.0
Line of Credit Facility, Maximum Borrowing Capacity, Accordion Feature		$ 90.0
Amount Drawn Under the Revolving Facility, Total	$ 57.7

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Note O - Subsequent Events (Details Textual) $ in Millions	Jul. 18, 2022 USD ($)	Jan. 21, 2022 USD ($)	Dec. 25, 2021 USD ($)
Debt to EBITDA Ratio	3
Restated Credit Agreement [Member] | Revolving Credit Facility [Member]
Line of Credit Facility, Maximum Borrowing Capacity		$ 65	$ 50
Restated Credit Agreement [Member] | Revolving Credit Facility [Member] | Subsequent Event [Member]
Line of Credit Facility, Maximum Borrowing Capacity	$ 75