What changed in this filing

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Item 1. Financial Statements

2025-10-30 compared with 2025-08-01 · 102 added, 167 removed, 273 unchanged (50% of the section changed)

3 unchanged sentences

All Amounts in Thousands Except Share Information

September 30,

December 31, 2024

September 30,

Current Assets:

5 unchanged sentences

Property, plant and equipment, net

Assets held for sale

Operating lease right-of-use assets

5 unchanged sentences

Accrued liabilities

Income tax payable

Current operating lease liabilities

22 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

All Amounts in Thousands Except Per Share Data

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Costs and Expenses

1 unchanged sentence

Selling, administrative and general expenses

Gain on sale of assets held for sale

Operating Income

11 unchanged sentences

All Amounts in Thousands

Balances at March 31, 2024

Balances at June 30, 2024

Expense of restricted stock units

Settlement of restricted stock units

Dividends declared

Balances at June 30, 2024

Balances at September 30, 2024

Balances at December 31, 2023

2 unchanged sentences

Dividends declared

Balances at June 30, 2024

Balances at September 30, 2024

All Amounts in Thousands

Balances at March 31, 2025

Balances at June 30, 2025

Expense of restricted stock units

Settlement of restricted stock units

Issuance of restricted stock awards

Dividends declared

Purchase of stock

Issuance of common stock for service

Balances at June 30, 2025

Balances at September 30, 2025

Balances at December 31, 2024

5 unchanged sentences

Issuance of common stock for service

Balances at June 30, 2025

Balances at September 30, 2025

See notes to Consolidated Condensed Financial Statements.

1 unchanged sentence

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

Six Months Ended

Nine Months Ended

All Amounts in Thousands

June 30, 2025

June 30, 2024

September 30,

Operating Activities:

2 unchanged sentences

Stock-based compensation

Loss on disposal of assets

Loss (gain) on disposal of assets

Common stock issued in lieu of bonus to officers

5 unchanged sentences

Proceeds from sale of property and equipment

Net cash used in investing activities

Net cash (used in) provided by investing activities

Financing Activities:

4 unchanged sentences

Net cash used in financing activities

Net increase in cash and cash equivalents

Net (decrease) increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

12 unchanged sentences

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 2024 filed with the Securities and Exchange Commission.

Goodwill – We perform our annual goodwill impairment analysis in the fourth quarter of each fiscal year, or more often if events or changes in circumstances indicate the carrying value of goodwill may not be recoverable, in accordance with guidance in Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 350, “ Intangibles – Goodwill and Other ” (“ASC 350”).

During the three months ended September 30, 2025, we identified a potential indicator of impairment due to the increase in tariff-related costs which led to the conclusion that a triggering event had occurred and therefore we performed a quantitative test for the single reporting unit.

We measure the fair value of our reporting unit based on a guideline company method and discounted cash flow method using a discount rate determined by Management to be commensurate with the risk inherent in our reporting unit’s current business model.

The fair market value was determined by weighting the two methods equally.

Our estimates of discounted cash flows, selected multiples and market value of invested capital to derive the fair value were measured in accordance with ASC 350.

Inputs to determine the fair value are considered to be level 3 inputs.

We are using estimates of discounted cash flows that may change, and if they change negatively it could result in the need to write down those assets to fair value.

Based on our interim impairment test of goodwill as of September 1, 2025, it was determined that the fair value of the reporting unit was in excess of the carrying value.

Although there was no impairment of goodwill, we noted that the fair value of the reporting unit exceeded its carrying value by approximately 6%.

If there is a continued increase in costs or other adverse events that could negatively impact the future cash flows of our business and its fair value, goodwill may be at risk of impairment in future periods.

Note B ‑ Seasonal Aspects

The results of operations for the three and six months ended June 30, 2025 and June 30, 2024 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the three and nine months ended September 30, 2025 and September 30, 2024 are not necessarily indicative of the results to be expected for the full year.

Note C ‑ Inventories

September 30,

December 31, 2024

September 30, 2024

Raw materials

2 unchanged sentences

Note D – Fair Values of Financial Instruments

Accounting Standard Codification (“ASC”) 820, “ Fair Value Measurement and Disclosures, ” outlines a valuation framework and creates a fair value hierarchy for assets and liabilities as follows:

ASC 820, “ Fair Value Measurement and Disclosures, ” outlines a valuation framework and creates a fair value hierarchy for assets and liabilities as follows:

Observable inputs such as quoted prices in active markets;

1 unchanged sentence

Unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions.

Due to their short-term nature, the fair value of cash and cash equivalents, accounts receivable, accounts payable and certain other liabilities approximated their carrying values at June 30, 2025, December 31, 2024 and June 30, 2024.

Due to their short-term nature, the fair value of cash and cash equivalents, accounts receivable, accounts payable and certain other liabilities approximated their carrying values at September 30, 2025, December 31, 2024 and September 30, 2024.

The Company believes the carrying value of borrowings under our senior secured revolving credit facility, due to variable rate interest, adequately reflects the fair value of these instruments.

The Company discloses the fair value of its term loan using Level 2 inputs, which are estimated using treasury rates for a similar instrument, as follows:

June 30, 2025

September 30, 2025

December 31, 2024

June 30, 2024

September 30, 2024

Term Loan Facility

1 unchanged sentence

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 June 30, 2025, the Company awarded 18,000 restricted stock units to directors, 105,181 restricted stock units and 35,000 shares of restricted stock to employees.

During the nine months ended September 30, 2025, the Company awarded 18,000 restricted stock units to directors, 105,181 restricted stock units and 35,000 shares of restricted stock to employees.

The restricted stock units awarded to directors time vest over two years ( one -half one year from grant date and one -half two years from grant date) provided that the director is still a director of the Company at the vest date.

2 unchanged sentences

The 35,000 shares of restricted stock vest on the fifth anniversary from the grant date provided that the employee is still employed by the Company on the vesting date.

For the three and six months ended June 30, 2025, the Company recognized stock based compensation expense of $ 495 thousand and $ 962 thousand, respectively compared to stock based compensation expense of $ 497 thousand and $ 926 thousand for the same periods in the prior year.

At June 30, 2025 and June 30, 2024, there was $ 2.8 million and $ 2.3 million, respectively, in unrecognized stock-based compensation expense related to non-vested stock awards.

The unrecognized compensation expense of unvested restricted stock awards not yet recognized as of June 30, 2025 is expected to be recognized over the weighted average period of 2.2 years.

For the three and nine months ended September 30, 2025, the Company recognized stock based compensation expense of $ 506 thousand and $ 1,468 thousand, respectively compared to stock based compensation expense of $ 503 thousand and $ 1,429 thousand for the same periods in the prior year.

At September 30, 2025 and September 30, 2024, there was $ 2.3 million and $ 1.8 million, respectively, in unrecognized stock-based compensation expense related to non-vested stock awards.

The unrecognized compensation expense of unvested restricted stock awards not yet recognized as of September 30, 2025 is expected to be recognized over the weighted average period of 2.1 years.

Note F ‑ Segment Information

3 unchanged sentences

As of and for the Three Months

Ended June 30, 2025

Ended September 30, 2025

Sporting Goods

7 unchanged sentences

Depreciation and Amortization

As of and for the Six Months

Ended June 30, 2025

As of and for the Nine Months

Ended September 30, 2025

Sporting Goods

8 unchanged sentences

As of and for the Three Months

Ended June 30, 2024

Ended September 30, 2024

Sporting Goods

7 unchanged sentences

Depreciation and Amortization

As of and for the Six Months

Ended June 30, 2024

As of and for the Nine Months

Ended September 30, 2024

Sporting Goods

14 unchanged sentences

The total amount of the dividend was approximately $ 2.1 million and was charged against retained earnings.

On October 13, 2025, the Company paid a quarterly dividend of $ 0.15 per common share to all shareholders of record on October 6, 2025.

The total amount of the dividend was approximately $ 2.1 million and was charged against retained earnings.

Note H ‑ Earnings Per Share

1 unchanged sentence

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Weighted average common shares outstanding

Dilutive effect of stock options and restricted stock units

Dilutive effect of restricted stock units

Weighted average common shares outstanding, assuming dilution

Note I – New Accounting Standards and Changes in Accounting Principles

With the exception of that discussed below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three and six months ended June 30, 2025, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, that are of significance, or potential significance to the Company.

With the exception of that discussed below, there have been no recent accounting pronouncements or changes in accounting pronouncements during the three and nine months ended September 30, 2025, as compared to the recent accounting pronouncements described in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, that are of significance, or potential significance to the Company.

In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740):

23 unchanged sentences

Changes in the estimated amounts recognized in prior years are recorded as an adjustment to the accrued liability and sales in the current year.

The accrued liability amount attributable to warranties was $ 556 thousand as of June 30, 2025.

The accrued liability amount attributable to warranties was $ 610 thousand as of September 30, 2025.

There were no changes to the accrual due to a change in estimate during the current period.

2 unchanged sentences

The Company reviews such allowances on an ongoing basis and accruals are adjusted, if necessary, as additional information becomes available.

Contract Balances – Amounts relating to returns and customer allowances create contract liabilities, which were $ 5,025 thousand, $ 6,708 thousand and $ 5,325 thousand as of June 30, 2025, December 31, 2024, and December 31, 2023.

Contract Balances – Amounts relating to returns and customer allowances create contract liabilities, which were $ 6,179 thousand, $ 6,708 thousand and $ 5,325 thousand as of September 30, 2025, December 31, 2024, and December 31, 2023.

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.

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

All Amounts in Thousands

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Gross Sales by Channel:

10 unchanged sentences

Our leases have remaining lease terms of 1 year to 4 years.

As of June 30, 2025, the Company has not entered into any lease arrangements classified as a finance lease.

As of September 30, 2025, the Company has not entered into any lease arrangements classified as a finance lease.

We determine if an arrangement is a lease at inception.

8 unchanged sentences

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:

Components of lease expense and other information are as follows:

Three Months Ended

Six Months Ended

Nine Months Ended

All Amounts in Thousands

September 30, 2025

September 30, 2024

September 30, 2025

September 30, 2024

Lease Expense

5 unchanged sentences

New ROU Assets – Operating Leases

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

Six Months Ended

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

Nine Months Ended

All Amounts in Thousands

September 30,

Weighted Average Remaining Lease Term – Operating Leases (in years)

Weighted Average Discount Rate – Operating Leases

Future minimum lease payments under non-cancellable leases as of June 30, 2025 were as follows:

Future minimum lease payments under non-cancellable leases as of September 30, 2025 were as follows:

All Amounts in Thousands

2 unchanged sentences

Less imputed interest

Reported as of June 30, 2025

Reported as of September 30, 2025

Current operating lease liabilities

11 unchanged sentences

The Fifth Amendment further revised the restricted payments covenant to provide that if at any time the Company’s Funded Debt to EBITDA Ratio would exceed 1.75 to 1.0, then the aggregate combined total of cash dividends and Company share repurchases may not exceed $ 12.0 million in any trailing twelve month period.

The Company was in compliance with the debt covenants set forth in the Restated Credit Agreement as of June 30, 2025.

As of June 30, 2025, the outstanding principal amount of the term loan was $ 22.0 million and total amount drawn under the Revolving Facility was zero .

The Company was in compliance with the debt covenants set forth in the Restated Credit Agreement as of September 30, 2025.

As of September 30, 2025, the outstanding principal amount of the term loan was $ 20.2 million and total amount drawn under the Revolving Facility was zero .

The term loan and Revolving Facility have a maturity date of January 21, 2027.

Note N – Provision for Taxes

The effective tax rate for the three months ending June 30, 2025 was 25.8 % compared to 23.8 % for the same three month period last year.

The effective tax rate for the first six months ending June 30, 2025 was 24.7 % compared to 23.8 % for the same period last year.

Note O – Subsequent Events

The effective tax rate for the three months ending September 30, 2025, was 22.0 % compared to 23.9 % for the same three month period last year.

The effective tax rate for the first nine months ending September 30, 2025, was 23.2 % compared to 23.9 % for the same period last year.

The lower tax rate for 2025 was primarily driven by tax windfall adjustments on stock incentives and favorable return to provision adjustments.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into law.

The OBBBA includes changes such as provisions allowing accelerated tax deductions for qualified property and research expenditures and provides permanent extensions of certain expiring provisions of the Tax Cuts and Jobs Act.

We are currently evaluating the impact of the OBBBA to our consolidated financial statements.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This report contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder.

All statements, other than statements of historical fact, are forward-looking statements.

These statements relate to our financial condition, results of operations, plans, objectives, future performance, capital actions or business.

They usually can be identified by the use of forward-looking language such as “will likely result,” “may,” “are expected to,” “is anticipated,” “potential,” “estimate,” “forecast,” “projected,” “intends to,” or may include other similar words or phrases such as “believes,” “plans,” “trend,” “objective,” “continue,” “remain,” or similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “might,” “can,” or similar verbs.

You should not place undue reliance on these statements, as they are subject to risks and uncertainties.

These risks include, but are not limited to:

Escalade’s ability to achieve its business objectives;

Escalade’s plans and expectations surrounding the transition to its new Chief Executive Officer and all potential related effects and consequences;

Escalade’s ability to successfully implement actions to lessen the potential impacts of tariffs, a potential trade war with China 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;

our international operations, including any related to political uncertainty and geopolitical tensions;

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 protect its intellectual property;

Escalade’s ability to develop and implement our own direct to consumer e-commerce distribution channel;

the impact of competitive products and pricing;

product demand and market acceptance;

new product development;

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, terrorist attacks, labor strikes, natural disasters, public health crises such as the coronavirus pandemic, and other events and circumstances beyond our control;

the evaluation and implementation of remediation efforts designed and implemented to enhance the Company’s control environment;

the potential identification of one or more additional material weaknesses in the Company’s internal control of which the Company is not currently aware or that have not yet been detected;

Escalade’s ability to control costs, including managing inventory levels;

general economic conditions, including inflationary pressures;

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, to maintain compliance with the terms of such financing and to manage debt levels;

the availability, integration and effective operation of information systems and other technology, and the potential interruption of such systems or technology;

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;

risks related to data security of privacy breaches;

the potential impact of regulatory claims, proceedings or investigations involving our products;

Escalade’s use of estimates in its financial reporting as well as in its forward looking statements;

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.

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.

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.

The United States Government has continued making new announcements concerning tariffs enacted and/or proposed to be enacted on the importation of goods into the United States as well as negotiations of trade agreements to potentially replace such tariffs.

Although the United States has begun to negotiate reciprocal trade agreements with several nations, few agreements have been finalized to date and the administration has paused or modified many of its announced tariffs leading to uncertainty with respect to which tariffs may apply and the size and scope of such tariffs.

While the United States and China have announced agreements on certain trade frameworks and have backed off of previously announced retaliatory tariffs and other restrictive measures, the details of these agreements have not been fully disclosed and concerns over a potential trade war have persisted.

Although the Company has engaged in actions to mitigate the potential impacts from tariffs and other economic pressures such as inflation and supply chain disruptions, it may not be able to effectively protect itself from these risks.

Tariffs, a potential trade war with China and other restrictions on trade could result in increased costs and/or the unavailability of goods purchased by the Company, which in turn may result in lower profitability and/or a decline in sales as well as the loss of goodwill among customers.

General economic conditions, inflation, recessionary fears, rising interest rates, changes in the housing market and declining consumer confidence also may impact the Company adversely.

Management cannot predict the full impact of these factors on the Company.

Due to the above circumstances and as described generally in this Form 10-Q, the Company’s results of operations for the period ended June 30, 2025 are not necessarily indicative of the results to be expected for fiscal year 2025.

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

June 30, 2025

June 30, 2024

June 30, 2025

June 30, 2024

Cost of products sold

Selling, administrative and general expenses

Operating income

Revenue and Gross Margin

Sales decreased 13.1% for the second quarter of 2025, compared with the same period in the prior year.

Sales decreased primarily due to softer market demand across most categories, including delayed customer shipments due to tariff volatility, partially offset by market share gains within the safety category.

For the six months ended June 30, 2025, net sales decreased 8.4% compared with the same period in the prior year, driven by the same factors that impacted the second quarter.

Gross margin increased 56 basis points to 24.7% for the second quarter of 2025 compared to 24.2% for the same period in 2024 primarily driven by lower fixed costs and decreased inventory storage and handling costs, partially offset by tariff-related costs and unfavorable product mix.

For the six months ended June 30, 2025, gross margin increased to 25.7% compared to 24.6% for the same period in 2024 driven by the favorable impact of lower fixed costs, partially offset by tariff-related costs and an unfavorable product mix.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (SG&A) were $10.2 million for the second quarter of 2025 compared to $10.1 million for the same period in the prior year, an increase of $0.1 million or 1.8%.

SG&A as a percent of sales is 18.9% for the second quarter of 2025 compared with 16.1% for the same period in the prior year.

For the six months ended June 30, 2025, SG&A were $20.8 million compared to $20.8 million for the same period in the prior year.

Provision (Benefit) for Income Taxes

The effective tax rate for the three months ending June 30, 2025 was 25.8% compared to 23.8% for the same three month period last year.

The effective tax rate for the first six months ending June 30, 2025 was 24.7% compared to 23.8% for the same period last year.

Financial Condition and Liquidity

Total debt as of June 30, 2025 was $22.0 million, a decrease of $3.6 million from December 31, 2024.

The following schedule summarizes the Company’s total debt:

Current portion of long-term debt

Long term debt

As a percentage of stockholders’ equity, total debt was 13.1%, 15.1% and 26.0% at June 30, 2025, December 31, 2024, and June 30, 2024 respectively.

On October 11, 2024, the Company entered into the Fifth Amendment (the “Fifth Amendment”) to its Amended and Restated Credit Agreement with its issuing bank, JPMorgan Chase Bank, N.A.

and the other lenders identified therein (the “Restated Credit Agreement”).

The Fifth Amendment eliminated the fixed charge coverage ratio covenant and related provisions.

The fixed charge ratio covenant was replaced by a new minimum interest coverage ratio covenant of 3.50 to 1:00 effective September 30, 2024.

Under the terms of the Fifth Amendment, the Company and the Lender also agreed to decrease the maximum availability under the senior revolving credit facility from $75.0 million to $60.0 million, but added an accordion feature that could increase the facility in an amount not to exceed $85.0 million.

The Company was in compliance with the debt covenants set forth in the Restated Credit Agreement as of June 30, 2025.

As of June 30, 2025, the outstanding principal amount of the term loan was $22.0 million and total amount drawn under the Revolving Facility was zero.

The Company funds working capital requirements and shareholder dividends through operating cash flows and revolving credit agreements with its Lenders.

The Company expects that cash generated from its 2025 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.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not Required.

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 2025.

There have been no changes to the Company’s internal control over financial reporting that occurred since the beginning of the Company’s second quarter of 2025 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

OTHER INFORMATION

LEGAL PROCEEDINGS.

Refer to Note L of the Notes to Consolidated Condensed Financial Statements in Part I, Item 1 for information regarding legal proceedings.

We are evaluating the impact of these provisions;

however, there were no discrete effects in the third quarter, and we do not expect a material impact on our 2025 consolidated financial statements.

Note O – Acquisition

During the three months ended September 30, 2025, the Company acquired substantially all of the Gold Tip assets from Revelyst, Inc.

Gold Tip is a leading brand for target archery, bow and crossbow hunting products.

The Gold Tip assets acquired at close included $ 1.5 million in trademarks and immaterial amounts of other assets.

The acquired trademarks will be amortized using the straight-line method over 20 years.

This acquisition was not and would not have been material to the Company’s net sales, results of operations or total assets during the three months ended September 30, 2025.

Accordingly, our consolidated results from operations do not differ materially from historical performance as a result of this acquisition, and therefore, pro-forma results are not presented.

Note P – Subsequent Events

On October 30, 2025, Escalade, Incorporated (“Escalade” or the “Company”) announced that Patrick J.

Griffin, the Company’s Vice President, Corporate Development and Investor Relations and a Director, has been appointed as the Company’s Interim President and Chief Executive Officer effective October 29, 2025.

Griffin replaces Armin Boehm, who resigned as of the same date.

Griffin, age 56, has served as Director at Escalade and Vice President, Corporate Development and Investor Relations for Escalade since August 2012.

Prior to that, Mr.

Griffin served as President of Martin Yale Group, a former subsidiary of Escalade.

Griffin has held various other roles at Escalade since 2002.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements