ESCALADE INC 10-K

ITEM 9A — CONTROLS AND PROCEDURES Evaluation of Disclosure Controls and Procedures Escalade maintains disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, 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 Interim Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. The Company carried out an evaluation, under the supervision and with the participation of the Company’s management, including the Company’s Interim 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 Interim Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective. Management ’ s Report on Internal Control over Financial Reporting Escalade’s management is responsible for establishing and maintaining adequate internal control over financial reporting for the Company. Escalade’s internal control system was designed 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. Internal control over financial reporting of the Company includes those policies and procedures that: (1) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions of the Company; 27 (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the Company’s financial statements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error or circumvention through collusion or improper overriding of controls. Therefore, even those internal control systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation. Further, because of changes in conditions, the effectiveness of internal control may vary over time. The management of Escalade assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025. In making its assessment of internal control over financial reporting, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control – Integrated Framework (published in 2013) and implemented a process to monitor and assess both the design and operating effectiveness of the Company’s internal control. Based on this assessment, management believes that, as of December 31, 2025, the Company’s internal control over financial reporting was effective. This annual report on Form 10-K includes an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report regarding internal control over financial reporting is subject to attestation by the Company’s registered public accounting firm pursuant to rules of the Securities and Exchange Commission. In addition, this report by management regarding internal control over financial reporting is specifically not incorporated by reference into any other filing by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. /s/ Patrick J. Griffin, Interim Chief Executive Officer /s/ Stephen R. Wawrin, Chief Financial Officer Changes in Internal Control over Financial Reporting Management’s evaluation did not identify any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended December 31, 2025, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B — OTHER INFORMATION None . ITEM 9C — DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS. Not applicable. 28 Part III ITEM 10 — DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Information required under this item with respect to Directors and Executive Officers will be contained in the registrant's proxy statement relating to its annual meeting of stockholders scheduled to be held on May 5, 2026 under the captions “Certain Beneficial Owners,” “Election of Directors,” “Executive Officers of the Registrant,” “Board of Directors, Its Committees, Meetings and Functions,” and “Delinquent Section 16(a) Reports,” and is incorporated herein by reference. The Company’s Board of Directors has adopted the Escalade, Incorporated Code of Business Conduct and Ethics (“Code”) which may be found on the Company’s website at: www.escaladeinc.com/Code_of_Conduct.html . All employees, including executive officers, and directors of the Company, are subject to compliance with the Code. In addition, any future amendments to, or waivers from, a provision of Escalade’s Code of Business Conduct and Ethics that applies to Escalade’s directors or executive officers (including Escalade’s principal executive officer, principal financial officer, and principal accounting officer or controller) will be posted at this internet address. Information required under this item with regard to insider trading policies and procedures will be contained in the registrant's proxy statement relating to its annual meeting of stockholders scheduled to be held on May 5, 2026 under the caption “Compensation Discussion and Analysis – Prohibitions on Hedging” and is incorporated herein by reference. ITEM 11 — EXECUTIVE COMPENSATION Information required under this item will be contained in the registrant's proxy statement relating to its annual meeting of stockholders scheduled to be held on May 5, 2026 under the captions “Compensation Discussion and Analysis,” “Compensation Committee Interlocks and Insider Participation,” “Compensation Committee Report” and “Executive Compensation” and is incorporated herein by reference, except that the information required by Item 407(e)(5) of Regulation S-K which appears under the caption “Report of the Compensation Committee” is specifically not incorporated by reference into this Form 10-K or into any other filing by the registrant under the Securities Act of 1933 or the Securities Exchange Act of 1934. ITEM 12 — SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS Except for the information required by Item 201(d) of Regulation S-K, which is included below, information required by this item will be contained in the registrant’s proxy statement relating to its annual meeting of stockholders scheduled to be held on May 5, 2026 under the captions “Certain Beneficial Owners” and “Election of Directors” and is incorporated herein by reference. Equity Compensation Plan Information Plan Category Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights (2) Weighted-Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans Equity compensation plans approved by security holders (1) - - 551,780 Equity compensation plans not approved by security holders - - - Total - 551,780 (1) The maximum number of shares that can be awarded under the Escalade, Incorporated 2017 Incentive Plan is 1,661,598. The plan was approved by stockholders at Escalade’s Annual Meetings of Stockholders in 2017. (2) Does not include 232,188 shares subject to outstanding, unvested restricted stock unit awards. 29 ITEM 13 — CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE The information required by Item 407(a) of Regulation S-K will be contained in the registrant’s proxy statement relating to its annual meeting of stockholders to be held on May 5, 2026 under the captions “Election of Directors” and “Board of Directors, Its Committees, Meetings and Functions” and is incorporated herein by reference. The information required by Item 404 of Regulation S-K will be contained in the registrant’s proxy statement relating to its annual meeting of stockholders scheduled to be held on May 5, 2026 under the caption “Certain Relationships and Related Person Transactions” and is incorporated herein by reference. ITEM 14 — PRINCIPAL ACCOUNTING FEES AND SERVICES The Company’s independent registered accounting firm is Grant Thornton, LLP; St. Louis, MO; PCAOB ID: 248. The information required by this item will be contained in the registrant’s proxy statement relating to its annual meeting of stockholders scheduled to be held on May 5, 2026 under the caption “Principal Accounting Firm Fees” and is incorporated herein by reference. Part IV ITEM 15 — EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a) Documents filed as a part of this report: (1) Financial Statement s Reports of Independent Registered Public Accounting Firm Consolidated financial statements of Escalade, Incorporated and subsidiaries: Consolidated balance sheets—December 31, 2025 and December 31, 2024 Consolidated statements of operations—fiscal years ended December 31, 2025 and December 31, 2024 Consolidated statements of stockholders’ equity—fiscal years ended December 31, 2025 and December 31, 2024 Consolidated statements of cash flows—fiscal years ended December 31, 2025 and December 31, 2024 Notes to consolidated financial statements All other schedules are omitted because of the absence of conditions under which they are required or because the required information is given in the consolidated financial statements or notes thereto. (3) Exhibits 3.1 Articles of Incorporation of Escalade, Incorporated. Incorporated by reference from Exhibit 3.1 to the Company’s 2007 First Quarter Report on Form 10-Q. 3.2 Amended By-Laws of Escalade, Incorporated. Incorporated by reference from Exhibit 3.2 to the Company’s 2022 Third Quarter Report on Form 10-Q filed on October 27, 2022. 4.1 Description of Escalade’s Registered Securities. Incorporated by reference from Exhibit 4.1 to the Company’s Form 10-K for the fiscal year ended December 31, 2024 and filed on March 10, 2025. 10.1 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 Exhibit 10.2 to the Company’s Form 8-K filed on January 24, 2022. 30 10.2 Amended and Restated Pledge and Security 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 Exhibit 10.3 to the Company’s Form 8-K filed on January 24, 2022. 10.3 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. Incorporated by reference from Exhibit 10.1 to the Company’s Form 8-K filed on July 21, 2022. 10.4 Second Amendment dated October 26, 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. Incorporated by reference from Exhibit 10.1 to the Company’s Form 8-K filed on October 27, 2022. 10.5 Third Amendment dated May 8, 2023 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. Incorporated by reference from Exhibit 10.1 to the Company’s Form 8-K filed on May 9, 2023. 10.6 Fifth Amendment dated October 11, 2024 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. Incorporated by reference from Exhibit 10.1 to the Company’s Form 8-K filed on October 15, 2024. (4) Executive Compensation Plans and Arrangements 10.6 Escalade, Incorporated 2017 Incentive Plan. Incorporated by reference herein from Annex 1 to the Registrant’s 2017 Definitive Proxy Statement filed on March 28, 2017. 10.7 Form of Stock Option Award Agreement utilized in Stock Option grants to employees pursuant to the Escalade, Incorporated 2017 Incentive Plan. Incorporated by reference from Exhibit 10.8 to the Company’s Form 10-K for the fiscal year ended December 30, 2017 and filed on February 27, 2018. 10.8 Form of Stock Option Award Agreement utilized in Stock Option grants to Directors pursuant to the Escalade, Incorporated 2017 Incentive Plan. Incorporated by reference from Exhibit 10.9 to the Company’s Form 10-K for the fiscal year ended December 30, 2017 and filed on February 27, 2018. 10.9 Form of Restricted Stock Unit Agreement utilized in Restricted Stock Unit grants to employees pursuant to the Escalade Incorporated 2017 Incentive Plan. Incorporated by reference from Exhibit 10.10 to the Company’s Form 10-K for the fiscal year ended December 30, 2017 and filed on February 27, 2018. 10.10 Form of Restricted Stock Unit Agreement utilized in Restricted Stock Unit grants to Directors pursuant to the Escalade, Incorporated 2017 Incentive Plan. Incorporated by reference from Exhibit 10.11 to the Company’s Form 10-K for the fiscal year ended December 30, 2017 and filed on February 27, 2018. 10.11 Executive Severance Agreement executed January 31, 2025, to be effective as of April 1, 2025, by and between Armin Boehm and Escalade, Incorporated. Incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on February 6, 2025. 10.12 Amendment, Waiver, Release, Non-Competition, Non-Solicitation, and Non-Disclosure Agreement dated as of November 5, 2025, by and between Armin Boehm and Escalade, Incorporated. Incorporated by reference from Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on November 10, 2025. 10.13 Offer Letter, dated November 10, 2025, by and between Patrick J. Griffin and Escalade, Incorporated. Incorporated by reference from Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 10, 2025. 19.1 Escalade, Incorporated Confidentiality of Insider Information and Securities Trades by Company Personnel. Incorporated by reference from Exhibit 19.1 to the Company’s Form 10-K for the fiscal year ended December 31, 2023 and filed on March 29, 2024. 31 21 Subsidiaries of the Registrant 23.1 Consent of Grant Thornton, LLP 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 97.1 Escalade, Incorporated Amended and Restated Policy for Recovery of Incentive Compensation. Incorporated by reference from Exhibit 97.1 to the Company’s Form 10-K for the fiscal year ended December 31, 2023 and filed on March 29, 2024. 99.1 Fourth Amendment effective as of September 1, 2023 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 (which Amendment Escalade has determined did not contain any material new or amended terms). Incorporated by reference from Exhibit 99.1 to the Company’s 2023 Third Quarter Report on Form 10-Q filed on October 26, 2023. 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) ITEM 16 — FORM 10-K SUMMARY None. 32 Escalade, Incorporated and Subsidiaries Index to Financial Statements The following consolidated financial statements of the Registrant and its subsidiaries and Independent Accountants’ Reports are submitted herewith: Page Reports of Independent Registered Public Accounting Firm (Grant Thornton LLP, PCAOB ID number 248 ) 34 Consolidated financial statements of Escalade, Incorporated and subsidiaries: Consolidated balance sheets—December 31, 2025 and December 31, 2024 37 Consolidated statements of operations—fiscal years ended December 31, 2025 and December 31, 2024 38 Consolidated statements of stockholders’ equity—fiscal years ended December 31, 2025 and December 31, 2024 39 Consolidated statements of cash flows—fiscal years ended December 31, 2025 and December 31, 2024 40 Notes to consolidated financial statements 41 33 Report of Independent Registered Public Accounting Firm Board of Directors and Shareholders Escalade, Incorporated Opinion on the financial statements We have audited the accompanying consolidated balance sheets of Escalade, Incorporated (an Indiana corporation) and subsidiaries (the “Company”) as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the two years in the period ended December 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated February 27, 2026 expressed an unqualified opinion. Basis for opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matter The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Goodwill impairment assessment for the Escalade Sports reporting unit As described further in Note 1 and Note 5 to the consolidated financial statements, the goodwill balance as of December 31, 2025, was $42.3 million, of which all of that balance was allocated to the Escalade Sports reporting unit. The Company reviews goodwill for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. The Company estimates the fair value of the Escalade Sports reporting unit by using a combination of the income and market approaches to perform the impairment assessment. We identified the determination of the Escalade Sports reporting unit’s fair value used in the goodwill impairment assessment as a critical audit matter. 34 The audit of the fair value and the related assumptions required a high degree of auditor judgment, including the need to involve our fair value specialists when testing the reasonableness of the models and methodologies used by management. Additionally, the fair value estimate contained highly judgmental and significant assumptions such as the revenue projections and assumed gross profit margins. Our audit procedures related to the goodwill impairment assessment for the Escalade Sports reporting unit included the following, among others. ● We tested the effectiveness of internal controls over the goodwill impairment analysis, including those over the inputs and assumptions used in the projections. ● We evaluated the reasonableness of management’s projections by comparing the projections to historical financial results, independent estimates, and industry reports. ● We performed sensitivity analyses of changes in the growth rate, which is the significant assumption, to evaluate the resulting changes in fair value with the assistance of our fair value specialists. ● We evaluated the reasonableness of the valuation methodologies, certain assumptions used within the models, and tested the mathematical accuracy of the valuation models with the assistance of our fair value specialists. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2024. St. Louis, Missouri February 27, 2026 35 Report of Independent Registered Public Accounting Firm Board of Directors and Shareholders Escalade, Incorporated Opinion on internal control over financial reporting We have audited the internal control over financial reporting of Escalade, Incorporated (an Indiana corporation) and subsidiaries (the “Company”) as of December 31, 2025, based on criteria established in the 2013 Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in the 2013 Internal Control — Integrated Framework issued by COSO. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated financial statements of the Company as of and for the year ended December 31, 2025, and our report dated February 27, 2026 expressed an unqualified opinion on those financial statements. Basis for opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and limitations of internal control over financial reporting A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ GRANT THORNTON LLP St. Louis, Missouri February 27, 2026 36 Escalade, Incorporated and Subsidiaries Consolidated Balance Sheets All Amounts in Thousands Except Share Information December 31, 2025 December 31, 2024 ASSETS Current Assets: Cash and cash equivalents $ 11,878 $ 4,194 Receivables, less allowance for credit losses of $ 1,226 and $ 694 ; respectively 46,315 48,768 Inventories 68,474 76,025 Prepaid expenses 3,351 4,372 Prepaid income tax 557 465 TOTAL CURRENT ASSETS 130,575 133,824 Property, plant and equipment, net 22,355 22,221 Operating lease right-of-use assets 1,276 1,186 Intangible assets, net 25,445 25,838 Goodwill 42,326 42,326 Other assets 132 935 TOTAL ASSETS $ 222,109 $ 226,330 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Current portion of long-term debt $ 7,143 $ 7,143 Trade accounts payable 9,150 11,858 Accrued liabilities 13,680 15,050 Current operating lease liabilities 510 444 TOTAL CURRENT LIABILITIES 30,483 34,495 Long-term debt 11,309 18,452 Deferred income tax liability, net 6,303 3,302 Operating lease liabilities 798 787 Other liabilities - 297 TOTAL LIABILITIES 48,893 57,333 Commitments and contingencies - - 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: 2025 — 13,696,311 shares, 2024 — 13,732,719 shares 3,013 4,218 Retained earnings 170,203 164,779 TOTAL STOCKHOLDERS’ EQUITY 173,216 168,997 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 222,109 $ 226,330 See notes to consolidated financial statements. 37 Escalade, Incorporated and Subsidiaries Consolidated Statements of Operations Years Ended All Amounts in Thousands Except Per Share Data December 31, 2025 December 31, 2024 Net Sales $ 240,158 $ 251,510 Costs and Expenses Cost of products sold 175,513 189,306 Selling, administrative and general expenses 43,626 43,303 Amortization 2,292 2,802 Gain on sale of assets held for sale - ( 3,905 ) Operating Income 18,727 20,004 Other Income (Expense) Interest expense ( 836 ) ( 2,302 ) Other income 131 74 Income Before Income Taxes 18,022 17,776 Provision for Income Taxes 4,321 4,790 Net Income $ 13,701 $ 12,986 Earnings Per Share Data: Basic earnings per share $ 1.00 $ 0.94 Diluted earnings per share $ 0.99 $ 0.93 See notes to consolidated financial statements. 38 Escalade, Incorporated and Subsidiaries Consolidated Statements of Stockholders ’ Equity Common Stock Retained All Amounts in Thousands Shares Amount Earnings Total Balances at December 31, 2023 13,737 $ 4,480 $ 160,099 $ 164,579 Net income - - 12,986 12,986 Expense of restricted stock units - 1,932 - 1,932 Settlement of restricted stock units 140 - - - Dividends declared - - ( 8,306 ) ( 8,306 ) Purchase of stock ( 144 ) ( 2,194 ) - ( 2,194 ) Balances at December 31, 2024 13,733 $ 4,218 $ 164,779 $ 168,997 Net income - - 13,701 13,701 Expense of restricted stock units - 1,651 - 1,651 Settlement of restricted stock units 165 - - - Issuance of common stock for service 16 242 - 242 Dividends declared - - ( 8,277 ) ( 8,277 ) Purchase of stock ( 218 ) ( 3,098 ) - ( 3,098 ) Balances at December 31, 2025 13,696 $ 3,013 $ 170,203 $ 173,216 See notes to consolidated financial statements. 39 Escalade, Incorporated and Subsidiaries Consolidated Statements of Cash Flows Years Ended All Amounts in Thousands December 31, 2025 December 31, 2024 Operating Activities: Net Income $ 13,701 $ 12,986 Reconciling adjustments: Depreciation and amortization 5,063 6,041 Allowance for credit losses 983 747 Stock option and restricted stock unit expense 1,651 1,932 Issuance of common stock for service 242 - Deferred income taxes 3,001 177 Loss (gain) on disposals of assets 7 ( 3,651 ) Changes in Accounts receivable 1,469 470 Inventories 7,551 16,437 Prepaids and other assets 1,732 ( 1,724 ) Accounts payable and accrued expenses ( 4,386 ) 2,634 Net cash provided by operating activities 31,014 36,049 Investing Activities: Purchase of property and equipment ( 2,512 ) ( 2,038 ) Acquisitions ( 2,300 ) - Proceeds from sale of property and equipment - 5,967 Net cash (used in) provided by investing activities ( 4,812 ) 3,929 Financing Activities: Dividends paid ( 8,277 ) ( 8,306 ) Proceeds from issuance of long-term debt 26,208 114,785 Payments on long-term debt ( 33,351 ) ( 140,085 ) Purchase of stock ( 3,098 ) ( 2,194 ) Net cash used in financing activities ( 18,518 ) ( 35,800 ) Increase in Cash and Cash Equivalents 7,684 4,178 Cash and Cash Equivalents, beginning of year 4,194 16 Cash and Cash Equivalents, end of year $ 11,878 $ 4,194 Supplemental Cash Flows Information Interest paid $ 812 $ 2,231 Income taxes paid, net $ 1,708 $ 4,989 See notes to consolidated financial statements. 40 Note 1 — Nature of Operations and Summary of Significant Accounting Policies Nature of Operations Escalade, Incorporated and its wholly-owned subsidiaries (Escalade, the Company, we, us or our) are engaged in the manufacture and sale of sporting goods products. The Company is headquartered in Evansville, Indiana and currently has manufacturing facilities in the United States of America. The Company imports many of its raw materials and finished goods from countries outside of the United States, including but not limited to China, Brazil, Vietnam and Mexico. The Company sells products to customers primarily in North America with minimal sales throughout the remainder of the world. Principles of Consolidation The consolidated financial statements include the accounts of Escalade, Incorporated and its wholly-owned subsidiaries. All material inter-company accounts and transactions have been eliminated. Basis of Presentation The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The books and records of subsidiaries located in foreign countries are maintained according to generally accepted accounting principles in those countries. Upon consolidation, the Company evaluates the differences in accounting principles and determines whether adjustments are necessary to convert the foreign financial statements to the accounting principles upon which the consolidated financial statements are based. As a result of this evaluation no material adjustments were identified. Cash and Cash Equivalents Highly liquid financial instruments with insignificant interest rate risk and with original maturities of three months or less are classified as cash and cash equivalents. Cash and cash equivalent balances may at times be in excess of federally insured limits. The Company maintains its cash and cash equivalent balances at high-credit quality financial institutions. Book overdrafts that result from outstanding checks in excess of our bank balance are reclassified to accrued liabilities. As of December 31, 2025, the Company reclassed $ 4 thousand of book overdrafts to accrued liabilities. As of December 31, 2024, the Company reclassed $ 134 thousand of book overdrafts to accrued liabilities. Accounts Receivable Revenue from the sale of the Company’s products 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. Accounts receivables are stated at the amount billed to customers, net of the allowance for credit losses and accrued discounts. Interest and late charges billed to customers are not material and, because collection is uncertain, are not recognized until collected and are therefore not included in accounts receivable. The Company provides an allowance for credit losses which is described in Note 2 – Certain Significant Estimates. Inventories We value inventories at the lower of cost (first-in, first-out) or net realizable value. We regularly review inventories for excess quantities and obsolescence based upon historical experience, specific identification of discontinued items, future demand, and market conditions. Work in process and finished goods inventory are determined to be saleable based on a demand forecast within a specific time horizon, generally one year or less. Inventories at fiscal year-ends were as follows: In Thousands 2025 2024 Raw materials $ 2,735 $ 2,721 Work in process 2,940 2,370 Finished goods 62,799 70,934 $ 68,474 $ 76,025 41 Property, Plant and Equipment Property, plant and equipment are recorded at cost. Depreciation and amortization are computed for financial reporting purposes principally using the straight-line method over the following estimated useful lives: buildings, 20 - 30 years; leasehold improvements, term of the lease; machinery and equipment, 5 - 15 years; and tooling, dies and molds, 2 - 5 years. Property, plant and equipment consist of the following: In Thousands 2025 2024 Land $ 1,337 $ 1,306 Buildings and leasehold improvements 30,083 28,954 Machinery and equipment 26,782 27,616 Total cost 58,202 57,876 Accumulated depreciation and amortization ( 35,847 ) ( 35,655 ) $ 22,355 $ 22,221 Depreciation expenses relating to property, plant and equipment for the years ended December 31, 2025 and 2024 were $ 2.8 million and $ 3.2 million, respectively. The Company evaluates the recoverability of certain long-lived assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Estimates of future cash flows used to test recoverability of long-lived assets include separately identifiable undiscounted cash flows expected to arise from the use and eventual disposition of the assets. Where estimated future cash flows are less than the carrying value of the assets, impairment losses are recognized based on the amount by which the carrying value exceeds the fair value of the assets. No asset impairment was recognized during the years ended 2025 or 2024. We classify assets as held for sale when our management approves and commits to a formal plan of sale that is probable of being completed within one (1) year. Assets designated as held for sale are recorded at the lower of their current carrying value or their fair market value, less costs to sell, beginning in the period in which the assets meet the criteria to be classified as held for sale. During 2024, the Company completed the sale of its Mexico facility for $ 6.6 million. The Company received cash proceeds of $ 5.9 million, with the remaining $ 0.7 million deposited in an escrow account. The Company recognized a gain of $ 3.9 million, included in operating income in the Consolidated Statement of Operations. Goodwill and Intangible Assets Goodwill represents the excess of the purchase price over fair value of net tangible and identifiable intangible assets of acquired businesses. Intangible assets consist of patents, consulting agreements, non-compete agreements, customer lists, developed technology, license agreements, and trade names. Goodwill is deemed to have an indefinite life and is not amortized. Other intangible assets are amortized using the straight-line method over the following lives: license agreements, 17 years; developed technology, 5 years; trade names, 20 years to indefinite life; consulting agreements, the life of the agreement; customer lists, 3 to 15 years; non-compete agreements, the lesser of the term or 5 years; and patents, the lesser of the remaining life or 5 to 15 years. The Company reviews goodwill and other indefinite lived intangibles for impairment annually and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable, in accordance with guidance in FASB ASC 350, Intangibles – Goodwill and Other . If we determine that the carrying value of the indefinite lived intangible is greater than the fair value, we record a permanent impairment charge for the amount by which the carrying value exceeds its fair value. 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. 42 During the third quarter of 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. Therefore, management performed a quantitative impairment analysis as of September 1, 2025 for goodwill, which included a detailed calculation of the fair value of our reporting unit. 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. A Step 0 analysis was performed during the remaining period from September 1, 2025 through December 31, 2025. Additionally, a Step 0 analysis was performed during 2025 and 2024 for our indefinite lived trade names. The results of these impairment analyses indicated that the fair values of the trade names and reporting unit are not less than their carrying values. 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, Intangibles – Goodwill and Other . 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. Employee Incentive Plan During 2017, the Company approved an incentive plan explained in Note 9. The Company accounts for this plan under the recognition and measurement principles of FASB ASC 718, Equity Based Payments . Debt Issuance Costs Costs incurred with the issuance of the Company’s senior revolving credit facility have been deferred and amortized over the term of the facility as a component of interest expense using the straight-line method. These deferred costs are included in other assets in the consolidated balance sheets. Foreign Currency The functional currency for the foreign operations of Escalade is the U.S. dollar. Gains or losses resulting from foreign currency transactions are included in selling, general and administrative expense in the Consolidated Statements of Operations and were insignificant in fiscal years 2025 and 2024. Cost of Products Sold Cost of products sold is comprised of those costs directly associated with or allocated to the products sold and include materials, labor and factory overhead. Research and Development Research and development costs are charged to expense as incurred. Research and development costs incurred during 2025 and 2024 were approximately $ 3.2 million and $ 3.2 million, respectively. Selling, General and Administrative Expense Selling, general and administrative expenses include personnel-related costs, including stock-based compensation, selling, advertising, and other general operating expenses. Advertising costs are expensed in the period incurred. Total advertising expenses incurred during 2025 and 2024 were approximately $ 7.7 million and $ 7.2 million, respectively. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Deferred tax assets may be reduced by a valuation allowance if it is more likely than not that some portion or all of the deferred tax assets will not be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are regularly reviewed for realizability, and a valuation allowance is established when the Company believes it is more likely than not the tax benefit of such assets will not be realized, taking into consideration historical operating results, expectations of future earnings, tax planning strategies, and the expected timing of the reversals of existing temporary differences. 43 The benefits of uncertain tax positions are recorded in the Company’s financial statements only after determining a more likely than not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes through the provision for income taxes. The Company recognizes interest and penalties relating to uncertain tax provisions as a component of interest expense and selling, general and administrative costs, respectively in the Company’s financial statements. New Accounting Pronouncements and Changes in Accounting Principles Standards Adopted: In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This amendment requires entities to provide additional information in the income tax rate reconciliation and additional disclosures about income taxes paid. The amendment requires entities to disclose in their rate reconciliation table additional categories of information about federal, state and foreign income taxes and to provide more details about the reconciling items in some categories if the items meet a quantitative threshold. The Company adopted ASU 2023-09 during the year ended December 31, 2025, on a prospective basis. The adoption of this ASU did not have a material impact on the Company’s consolidated financial condition or results of operation, but resulted in expanded disclosures within the income tax footnote related to the rate reconciliation and income taxes paid. New Accounting Standards to be Adopted In November 2024, the FASB issued ASU 2024.03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. This amendment requires additional disclosures of certain costs and expenses within the notes to the financial statements. The updated standard is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is in the process of evaluating the impact that the updated standard will have on our financial statement disclosures. Note 2 — Certain Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities; the disclosure of contingent assets and liabilities at the date of the consolidated financial statements; and the reported amounts of revenues and expenses during the reporting period. These estimates and judgments are evaluated on an ongoing basis and are based on experience; current and expected future conditions; third party evaluations; and various other assumptions believed reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities as well as identifying and assessing the accounting treatment with respect to commitments and liabilities. Actual results may differ from the estimates and assumptions used in the financial statements and related notes. Listed below are certain estimates and assumptions related to the preparation of the consolidated financial statements: Product Warranty The Company provides limited warranties on certain of its products, for varying periods. Generally, the warranty periods range from 30 days to one year. However, some products carry extended warranties of three -year, five -year, seven -year, ten -year, fifteen -year, and lifetime warranties. The Company records 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. 44 Changes in product warranty were as follows: In Thousands 2025 2024 Beginning balance $ 649 $ 590 Additions 1,012 1,690 Deductions ( 1,043 ) ( 1,631 ) Ending balance $ 618 $ 649 Allowance for Credit Losses The Company provides an allowance for credit losses based upon a review of outstanding receivables, historical collection experience and financial condition of the customer. Accounts receivables are ordinarily due between 30 and 60 days after the issuance of the invoice. Changes in allowance for credit losses were as follows: In Thousands 2025 2024 Beginning balance $ 694 $ 652 Additions 983 747 Deductions ( 451 ) ( 705 ) Ending balance $ 1,226 $ 694 Note 3 — Accrued Liabilities Accrued liabilities consist of the following: In Thousands 2025 2024 Employee compensation $ 5,091 $ 4,635 Customer co-op and volume allowances 1,475 1,543 Customer return accruals and other allowances 3,849 5,165 Other accrued items 3,265 3,707 $ 13,680 $ 15,050 Note 4 — 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 4 years. As of December 31, 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. 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 (total expected use of 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 and are factored into the ROU asset/liability 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. Variable lease costs include payments for taxes and common area maintenance charges. 45 On December 31, 2024, the Company terminated its long-term lease for its facility in Orlando, FL. The initial expiration date of the lease was January 2033. The removal of the related ROU asset and lease liability created a non-cash gain of $ 522 thousand. As part of the termination agreement, the Company received a payment of $ 500 thousand from the lessor. This coupled with the removal of the ROU asset and lease liability, offset by related expenses to settle the lease, resulted in a net gain on lease termination of $ 685 thousand, recorded as a reduction to cost of products sold in the consolidated statement of operations. The $ 500 thousand payment received is netted against operating lease operating cash flows below. Components of lease expense and other information are as follows: All Amounts in Thousands Twelve Months Ended December 31, 2025 Twelve Months Ended December 31, 2024 Lease Expense Operating Lease Cost $ 584 $ 1,341 Short-term Lease Cost 1,031 1,228 Variable Lease Cost 189 529 Gain on Lease Termination - ( 685 ) Total Operating Lease Cost $ 1,804 $ 2,413 Operating Lease – Operating Cash Flows $ 597 $ 991 New ROU Assets/Liabilities – Operating Leases (non-cash) $ 585 $ 52 Other information about lease amounts recognized in our consolidated financial statements is summarized as follows: Period Ended December 31, 2025 Period Ended December 31, 2024 Weighted Average Remaining Lease Term – Operating Leases (in years) 2.96 2.84 Weighted Average Discount Rate – Operating Leases 6.72 % 6.23 % Future minimum lease payments under non-cancellable leases as of December 31, 2025 were as follows: All Amounts in Thousands 2026 $ 580 2027 473 2028 203 2029 136 2030 55 Thereafter - Total future minimum lease payments 1,447 Less imputed interest ( 139 ) Total $ 1,308 46 Note 5 — Acquired Intangible Assets and Goodwill The carrying basis and accumulated amortization of recognized intangible assets, excluding intangible assets which have been fully amortized, are summarized in the following table: 2025 2024 In Thousands Gross Carrying Amount Accumulated Amortization Gross Carrying Amount Accumulated Amortization Patents 24,715 24,608 24,715 24,533 Customer list 22,017 14,776 22,017 13,122 Trade names 20,535 2,438 18,636 1,875 67,267 41,822 65,368 39,530 Amortization expense was $ 2.3 million and $ 2.8 million for 2025 and 2024, respectively. At December 31, 2025, the net carrying amount of trade names includes $ 7.8 million related to indefinite-lived intangible assets which are not amortized but are evaluated for impairment at least annually. Estimated future amortization expense is summarized in the following table: All Amounts in Thousands 2026 $ 2,313 2027 2,227 2028 1,576 2029 1,469 2030 1,284 Thereafter 8,792 Subtotal 17,661 Indefinite-lived intangible asset balance 7,784 Total $ 25,445 Consistent with our operating segment conclusion, we have concluded one reporting unit exists and all goodwill and indefinite lived intangibles are allocated to that reporting unit. There were no changes to the carrying amount of goodwill in 2025 or 2024. Note 6 — Borrowings On January 21, 2022, the Company and its wholly owned subsidiary, Indian Industries, Inc. (“Indian”), entered into an Amended and Restated Credit Agreement (“2022 Restated Credit Agreement”) with its issuing bank, JP Morgan Chase Bank, N.A. (“Chase”), and the other lenders identified in the 2022 Restated Credit Agreement (collectively, the “Lenders”). Under the terms of the 2022 Restated Credit Agreement, Old National Bank was added as a Lender. The Lenders 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. In addition to the increased borrowing amount and extended maturity date, the 2022 Restated Credit Agreement provided a $ 7.5 million swingline commitment by Chase, replaced LIBOR with the replacement benchmark secured overnight financing rate, and adjusted certain financial covenants relating to the fixed charge coverage ratio. 47 On July 18, 2022, the Company entered into the First Amendment (the “First Amendment”) to the 2022 Restated Credit Agreement. Under the terms of the First Amendment, the Lenders 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 2022 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. On October 26, 2022, the Company entered into the Second Amendment (the “Second Amendment”) to the 2022 Restated Credit Agreement. Under the terms of the Second Amendment, the Lenders increased the maximum availability under the senior revolving credit facility from $ 75.0 million to $ 90.0 million pursuant to the accordion feature in the 2022 Restated Credit Agreement. The Second Amendment adjusted the funded debt to EBITDA ratio financial covenant to 3:25 to 1:00 as of the end of the Company’s third and fourth fiscal quarters of 2022 and 3 :00 to 1:00 as of the end of the Company’s first fiscal quarter of 2023. The Second Amendment also modified the EBITDA definition to permit add-backs of a) up to $ 2.0 million for disposition related expenses; and b) up to $ 2.0 million for unusual or non-recurring expenses which are incurred prior to the end of fiscal year 2023 and which are subject to the approval of the Administrative Agent. On May 8, 2023, the Company entered into the Third Amendment (the “Third Amendment”) to the Restated Credit Agreement. The Third Amendment adjusted the funded debt to EBITDA ratio financial covenant to 4:25 to 1:00 as of the end of the Company’s second fiscal quarter of 2023, 3:00 to 1:00 as of the end of the Company’s third fiscal quarter of 2023, and 2:75 to 1:00 as of the end of the Company’s fourth fiscal quarter of 2023 and thereafter. The Third Amendment adjusted the fixed charge coverage ratio covenant to 1:10 to 1:00 commencing as of the Company’s fourth fiscal quarter of 2023 and 1:25 to 1:00 as of the end of the Company’s first fiscal quarter of 2024 and thereafter. For the Company’s second and third fiscal quarters in 2023, the Third Amendment suspended the fixed charge coverage ratio covenant and added a minimum EBITDA covenant of $ 22.5 million as of the end of each such fiscal quarter. Under the terms of the Third Amendment, the Company and the Lender also agreed to decrease the maximum availability under the senior revolving credit facility from $ 90.0 million to $ 75.0 million, upon the consummation of the sale of the Company’s Mexican subsidiary and the dissolution of Escalade Insurance, Inc. The proceeds from such sale and dissolution, respectively, were used to partially prepay the amounts outstanding under the revolving credit facility. As reflected in the Fourth Amendment to the Restated Credit Agreement effective September 1, 2023, the maximum availability of the senior revolving credit facility was reduced to $ 85.0 million following the dissolution of Escalade Insurance, Inc. On October 11, 2024, the Company entered into the Fifth Amendment (the “Fifth Amendment”) to 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 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. 48 Each loan will bear interest based on the applicable SOFR rate for the interest period in effect plus the Applicable Rate. The Applicable Rate shall be determined as of the end of each quarter 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 is effective during the period commencing the date of delivery to the agent. The Company’s indebtedness under the 2022 Restated Credit Agreement continues to be collateralized by liens on all of the present and future equity of each of the Company’s and Indian’s domestic subsidiaries and substantially all of the assets of the Company (excluding real estate). Each direct and indirect domestic subsidiary of the Company 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. The obligations, guarantees, liens and other interests granted by the Company, Indian, and their domestic subsidiaries continues in full force and effect. The Company was in compliance with the debt covenants set forth in the 2022 Restated Credit Agreement as of December 31, 2025. Long-Term Debt Long-term debt at fiscal year-ends was as follows: In Thousands 2025 2024 Senior secured revolving credit facility of $ 60.0 million with a maturity of January 21, 2027. The interest rate at December 31, 2025 was 6.5 % and 7.25 % at December 31, 2024. $ - $ - Term loan of $ 50.0 million with a maturity date of January 21, 2027. The interest rate at December 31, 2025 and December 31, 2024, was 2.97 %. 18,452 25,595 18,452 25,595 Current portion of long-term debt ( 7,143 ) (7,143 ) $ 11,309 $ 18,452 The Company makes monthly principal payments under the Term loan of $ 595 thousand. As of December 31, 2025, the Company had $ 52.9 million of availability on its senior secured revolving credit facility. 49 Note 7 — Earnings Per Share The shares used in the computation of the Company’s basic and diluted earnings per common share are as follows: In Thousands 2025 2024 Weighted average common shares outstanding 13,751 13,844 Dilutive effect of stock options and restricted stock units 111 197 Weighted average common shares outstanding, assuming dilution 13,862 14,041 Number of anti-dilutive stock options and unvested restricted stock units - - Weighted average common shares outstanding, assuming dilution, includes the incremental shares that would be issued upon the assumed exercise of stock options outstanding. Note 8 — Employee Benefit Plans The Company has an employee profit-sharing salary reduction plan, pursuant to the provisions of Section 401(k) of the Internal Revenue Code, for all employees. The Company’s contribution is a matching percentage of the employee contribution as determined by the Board of Directors annually. The Company’s expenses for the plan were $ 1.2 million and $ 1.0 million for 2025 and 2024, respectively. Note 9 — Stock Compensation Plans In May 2017, Shareholders approved the Escalade, Incorporated 2017 Incentive Plan (2017 Incentive Plan), which is an incentive plan for key employees, directors and consultants with various equity-based incentives as described in the plan document. The 2017 Incentive Plan is a replacement for the 2007 Incentive Plan, which expired at the end of April 2017. The 2017 Incentive Plan is administered by the Board of Directors or a committee thereof, which is authorized to determine, among other things, the key employees, directors or consultants who will receive awards under the plan, the amount and type of award, exercise prices or performance criteria, if applicable, and vesting schedules. Under the original terms of the plan and subject to various restrictions contained in the plan document, the total number of shares of common stock which may be issued pursuant to awards under the Plan may not exceed 1,661,598 . Restricted Stock Awards In 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. Director restricted stock units are subject to forfeiture, except for termination of services as a result of retirement, death or disability, if on the vesting date the director no longer holds a position with the Company. All of the 2025 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. The 35,000 shares of restricted stock were forfeited during the three months ended December 31, 2025. The Company has elected to account for forfeitures when they actually occur. 50 A summary of restricted stock awards activity is as follows: Number of Shares Weighted Average Grant Date Fair Value Non-vested stock units as of December 31, 2023 305,126 $ 13.58 Granted 143,700 12.86 Vested ( 140,502 ) 13.91 Forfeited ( 1,002 ) 12.98 Non-vested stock units as of December 31, 2024 307,322 $ 13.09 Granted 158,181 15.31 Vested ( 165,485 ) 13.32 Forfeited ( 67,830 ) 15.78 Non-vested stock units as of December 31, 2025 232,188 $ 13.65 The closing market price of the Company’s stock on the grant date is used to value restricted stock units. In 2025 and 2024 the Company recognized $ 1.7 million and $ 1.9 million, respectively, in compensation expense related to restricted stock units and as of December 31, 2025 and December 31, 2024, there was $ 1.0 million and $ 1.3 million, respectively, of unrecognized compensation expense related to restricted stock units. The unrecognized compensation expense of unvested restricted stock awards not yet recognized as of December 31, 2025 are expected to be recognized over the weighted average period of 1.26 years. Note 10 — Provision for Taxes The U.S. and non-U.S. components of income before income tax expense for the year ended December 31, 2025 are as follows: In Thousands 2025 Income before taxes: United States of America (U.S.A.) $ 18,022 Non-U.S.A. - Total income from continuing operations before income tax expense $ 18,022 Provision for taxes: Current Federal $ 894 State 426 International - Total current income tax expense 1,320 Deferred Federal 2,655 State 346 International - Total deferred income tax expense 3,001 Total income tax expense $ 4,321 51 Income before taxes and the provision for taxes consisted of the following for the year ended December 31, 2024. In Thousands 2024 Income before taxes: $ 17,776 Provision (benefit) for taxes: Current Federal $ 3,985 State 627 4,612 Deferred Federal 188 State ( 10 ) 178 $ 4,790 The provision for income taxes was computed based on income before taxes. A reconciliation of the provision for income taxes to the amount computed using the statutory rate for the year ended December 31, 2025 follows: In Thousands 2025 Income tax at statutory rate $ 3,785 21.0 % Increase (decrease) in income tax resulting from State tax expense, net of federal effect 610 3.4 % Effect of changes in tax laws or rates enacted in the current period - Tax credits ( 140 ) ( 0.8 %) Valuation allowances - Nontaxable items or nondeductible items Stock based compensation ( 34 ) ( 0.2 %) Other nontaxable or nondeductible items 103 0.6 % Changes in unrecognized tax benefits - Other ( 3 ) ( 0.0 %) Recorded provision for income taxes $ 4,321 24.0 % A reconciliation of the provision for income taxes to the amount computed using the statutory rate for the year ended December 31, 2024 follows: In Thousands 2024 Income tax at statutory rate $ 3,733 Increase (decrease) in income tax resulting from State tax expense, net of federal effect 487 Federal true-ups 121 Federal tax credits ( 158 ) Sale of Harvard Sports 582 Incentive stock options ( 8 ) Other 33 Recorded provision for income taxes $ 4,790 The Company’s state and local income tax expense for the year ended December 31, 2025, primarily relates to operations in the following jurisdictions: California, Florida, and Illinois. These states collectively represent more than 50% of the total state and local income tax expense recognized for the period. 52 The provision for income taxes was computed based on income before taxes. In accordance with FASB ASC 740, the Company has no uncertain tax positions for the years ending December 31, 2025 and 2024. Interest costs and penalties, when applicable, related to income taxes are classified as interest expense and selling, general and administrative costs, respectively in the Company’s financial statements. The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, and multiple state and foreign jurisdictions. The Company is subject to future examinations by federal, state and other tax authorities for all years after 2021. The Company has state, net of federal benefit, research tax credit carryforwards of $ 265 thousand as of December 31, 2025. The state research tax credit carryforwards began to expire in 2025. The related valuation allowance was decreased to the amount of $ 265 thousand as of December 31, 2025, leaving an ending deferred, net of federal benefit, in the amount of zero . The decrease in the valuation allowance relates to the increase in the projected tax liability which would be offset by the credit carryforward. The valuation allowance is based on the historical results and estimated future results of the Company, as it is the judgment of management not all of these tax carryforward attributes will be realized before they begin to expire. At December 31, 2025, the Company had domestic federal income taxes receivable of $ 540 thousand and a domestic state income taxes receivable of $ 17 thousand. At December 31, 2024, the Company had domestic federal income taxes receivable of $ 254 thousand, domestic state income taxes receivable of $ 211 thousand, and transition tax payable of $ 297 thousand recorded. The tax effects of temporary differences and carryforwards that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 2025 and 2024 are as follows: In Thousands 2025 2024 Assets Valuation reserves $ 1,169 $ 1,350 Stock based compensation 10 217 Federal and state credits 265 322 Lease obligation 306 288 Other - 4 Capitalized research costs 448 2,714 Total assets 2,198 4,895 Liabilities Property and equipment ( 833 ) ( 864 ) Goodwill and intangible assets ( 6,511 ) ( 6,139 ) Lease – right of use asset ( 298 ) ( 277 ) Prepaid insurance ( 594 ) ( 595 ) Total liabilities ( 8,236 ) ( 7,875 ) Valuation Allowance Beginning balance ( 322 ) ( 319 ) (Increase) Decrease during period 57 ( 3 ) Ending balance ( 265 ) ( 322 ) $ ( 6,303 ) $ ( 3,302 ) 53 Deferred tax assets (liabilities) are included in the consolidated balance sheets as follows: In Thousands 2025 2024 Deferred income tax asset – current $ - $ - Deferred income tax asset (liability) – long-term ( 6,303 ) ( 3,302 ) $ ( 6,303 ) $ ( 3,302 ) The total amount of unrecognized tax benefits, net of federal income tax benefits, were zero at December 31, 2025 and December 31, 2024. The Company had no accrued interest and penalties related to taxes, recognized as a liability, as of December 31, 2025. The Company has assessed its risk associated with all tax return positions and believes its tax reserve estimate reflects its best estimate of the deductions and positions it will be able to sustain, or it may be willing to concede as part of a settlement. The Company will continue to monitor the progress and conclusion of all audits and will adjust its estimated liability as necessary. The following jurisdictions had income taxes paid (net of refunds) for the year ended December 31, 2025: In Thousands Federal Taxes Paid $ 1,477 State & Local Taxes Paid Illinois 89 Other States (Aggregate) 142 Total State and Local Taxes Paid 231 Total Income Taxes Paid, Net $ 1,708 Note 11 — Operating Segment and Geographic Information The Company operates as one operating segment. The Company’s chief operating decision maker (“CODM”) is its interim president and chief executive officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated net sales and consolidated net income to assess financial performance and allocate resources. 54 Reconciliation to net income: In Thousands 2025 2024 Net Sales Sporting Goods $ 240,158 $ 251,510 Total Net Sales $ 240,158 $ 251,510 Sporting Goods Segment Operating Expenses: Cost of products sold $ 175,513 $ 189,306 Other operating expenses 43,299 39,116 Sporting Goods segment expenses 218,812 228,422 Sporting Goods Segment Operating Income 21,346 23,088 Unallocated corporate expense ( 2,619 ) ( 3,084 ) Total Operating Income $ 18,727 $ 20,004 Consolidated Other Income (Expense): Interest expense ( 836 ) ( 2,302 ) Other income 131 74 Total Income Before Income Taxes $ 18,022 $ 17,776 Sporting Goods Segment Provision for Income Taxes 5,671 5,732 Unallocated benefit for taxes ( 1,350 ) ( 942 ) Total Net Income $ 13,701 $ 12,986 Identifiable Assets Sporting Goods $ 206,889 $ 217,941 Corporate 15,220 8,389 Total Identifiable Assets $ 222,109 $ 226,330 Depreciation and Amortization Sporting Goods $ 5,063 $ 6,041 Unallocated corporate - - Total Depreciation and Amortization $ 5,063 $ 6,041 Capital Expenditures Sporting Goods $ 2,512 $ 2,038 Corporate - - Total Capital Expenditures $ 2,512 $ 2,038 There were no changes to the composition of segments in 2025. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. The Sporting Goods segment consists of home entertainment products such as table tennis tables and accessories; basketball goals; pickleball; pool tables and accessories; outdoor playsets; water sports; soccer and hockey tables; archery equipment and accessories; and fitness, arcade and darting products. Customers include retailers, dealers and wholesalers located throughout North America, Europe and the rest of the world. All Other consists of general and administrative expenses not specifically related to the operating business segment. During 2025 and 2024, the Company had one customer that accounted for approximately 19 % of the Company’s revenues. During 2025 and 2024, the Company had another customer which accounted for approximately 11 % and 13 %, respectively, of the Company’s revenues. 55 As of December 31, 2025 and December 31, 2024, the Company had approximately 23 % and 25 %, respectively, of its total accounts receivable with one customer. Net sales are attributed to country based on location of customer. Net sales by geographic region/country were as follows: In Thousands 2025 2024 United States $ 228,611 $ 239,472 Canada 5,668 5,579 Australia 1,513 1,669 Other 4,366 4,790 $ 240,158 $ 251,510 Note 12 — Commitments and Contingencies The Company is involved in litigation arising in the normal course of its 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. The Company has entered into various agreements whereby it is required to make minimum purchase commitments, royalty and license payments. The Company entered into a non-cancelable minimum purchase agreement during 2024 with a term of three years. The minimum purchases made during the current year related to this agreement were approximately $ 1,148 thousand. At December 31, 2025, the Company had future estimated minimum non-cancelable purchase commitments, royalty and license payments as follows: In Thousands Amount 2026 $ 1,957 2027 5,621 2028 641 2029 664 2030 - Thereafter - $ 8,883 Note 13 — 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: - Level 1: Observable inputs such as quoted prices in active markets; - Level 2: Inputs other than quoted prices in active markets that are either directly or indirectly observable; and - Level 3: 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 current liabilities approximated their carrying values at December 31, 2025 and December 31, 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. We measure certain items at fair value on a nonrecurring basis, primarily goodwill, and long-lived tangible and ROU assets, in connection with periodic evaluations for potential impairment. We estimate the fair value of these assets using primarily unobservable inputs and, as such, these are considered Level 3 fair value measurements. 56 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: December 31, 2025 December 31, 2024 In thousands Carrying Value Fair Value Carrying Value Fair Value Term Loan Facility $ 18,452 $ 17,689 $ 25,595 $ 23,528 Note 14 — Revenue from Contracts with Customers Revenue Recognition – Revenue is recognized when a contract exists with a customer that specifies the goods to be provided at an agreed upon sales price and when the performance obligations under the terms of the contract 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 control. Sales are made on normal and customary short-term credit terms or upon delivery of point-of-sale transactions. 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. The Company enters into contractual arrangements with customers in the form of customer orders that specify goods, quantity, pricing, and associated order terms. The Company does not have long-term contracts that are satisfied over time. The Company does not adjust the amount of consideration for the effects of significant financing components based on expectations that the period between when the sale of goods is recognized and when the customer pays for the goods will be one year or less. Due to the nature of the contracts, no significant judgment exists in relation to the identification of the customer contract, satisfaction of the performance obligations, or transaction price. The Company expenses incremental costs of obtaining a contract due to the short-term nature of the contracts. 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 industry 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 adjusts, if necessary, as additional information becomes available. Contract Balances – Amounts relating to returns and customer allowances create contract liabilities. Contract balances from contracts with customers are as follows: In Thousands 2025 2024 Customer co-op and volume allowances $ 1,475 $ 1,543 Other customer allowances 1,614 1,898 Customer returns and defectives accrual 2,235 3,267 57 January 1, 2024 balances for customer co-op and volume allowances, other customer allowances, and customer returns and defectives accrual were $ 1.7 million, $ 1.5 million, and $ 2.2 million, respectively. There are no revenues recognized in 2025 on performance obligations entered into in 2024. As of December 31, 2025, there were no unperformed performance obligations. Contract assets consist of accounts receivables and the January 1, 2024 balance was $ 50.0 million, net of allowance for credit losses. 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: Years Ended In Thousands December 31, 2025 December 31, 2024 Gross Sales by Channel: Mass Merchants $ 87,507 $ 91,720 Specialty Dealers 77,788 81,076 E-commerce 86,944 94,675 International 11,773 13,114 Other 2,855 3,371 Total Gross Sales 266,867 283,956 Less: Gross-to-Net Sales Adjustments Returns 6,448 8,665 Warranties 1,011 1,690 Customer Allowances 19,250 22,091 Total Gross-to-Net Sales Adjustments 26,709 32,446 Total Net Sales 240,158 251,510 Note 15 — Acquisitions In September 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. In December 2025, the Company acquired substantially all the assts of AllCornhole, a leading brand of cornhole bags and equipment for competitive cornhole. The AllCornhole assets acquired at close included $ 0.4 million in trademarks and immaterial amounts of other assets. The acquired trademarks will be amortized using the straight-line method over 20 years. These acquisitions, individually and in total, were not and would not have been material to the Company’s net sales, results of operations or total assets during the year ended December 31, 2025. 58 Signatures Pursuant to the requirements of Section 13 or 15(d) 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 By: /s/ Patrick J. Griffin February 27, 2026 Patrick J. Griffin Interim President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated. /s/ Walter P. Glazer, Jr. Walter P. Glazer, Jr. Chairman and Director February 27, 2026 /s/ Katherine F. Franklin Director February 27, 2026 Katherine F. Franklin /s/ Edward E. Williams Director February 27, 2026 Edward E. Williams /s/ Richard Baalmann, Jr. Director February 27, 2026 Richard Baalmann, Jr. /s/ Patrick J. Griffin Patrick J. Griffin Director and Interim President and Chief Executive Officer February 27, 2026 /s/ Stephen R. Wawrin Vice President and Chief Financial February 27, 2026 Stephen R. Wawrin Officer (Principal Financial and Accounting Officer) 59