What changed in this filing

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Item 1. Financial Statements

2026-07-30 compared with 2026-04-30 · 132 added, 71 removed, 318 unchanged (39% of the section changed)

3 unchanged sentences

All Amounts in Thousands Except Share Information

March 31, 2026

December 31, 2025

March 31, 2025

Current Assets:

3 unchanged sentences

Prepaid income tax

Other current assets

TOTAL CURRENT ASSETS

14 unchanged sentences

Operating lease liabilities

Other liabilities

TOTAL LIABILITIES

15 unchanged sentences

Three Months Ended

Six Months Ended

All Amounts in Thousands Except Per Share Data

June 30, 2026

June 30, 2025

June 30, 2026

June 30, 2025

Costs and Expenses

1 unchanged sentence

Selling, administrative and general expenses

Tariff recovery

Operating Income

12 unchanged sentences

All Amounts in Thousands

Balances at March 31, 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 December 31, 2024

1 unchanged sentence

Settlement of restricted stock units

Issuance of restricted stock awards

Dividends declared

1 unchanged sentence

Issuance of common stock for service

Balances at June 30, 2025

All Amounts in Thousands

Balances at March 31, 2026

Expense of restricted stock units

Settlement of restricted stock units

Dividends declared

Purchase of stock

Balances at June 30, 2026

Balances at December 31, 2025

4 unchanged sentences

Issuance of common stock for service

Balances at March 31, 2026

Balances at June 30, 2026

See notes to Consolidated Condensed Financial Statements.

1 unchanged sentence

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)

Three Months Ended

Six Months Ended

All Amounts in Thousands

March 31, 2026

March 31, 2025

June 30, 2026

June 30, 2025

Operating Activities:

4 unchanged sentences

Common stock issued in lieu of bonus to officers

Director stock compensation

Changes in assets and liabilities

9 unchanged sentences

Net cash used in financing activities

Net increase (decrease) in cash and cash equivalents

Net increase in cash and cash equivalents

Cash and cash equivalents, beginning of period

2 unchanged sentences

Interest paid

Income taxes (refunded) paid, net

Income taxes paid, net

See notes to Consolidated Condensed Financial Statements.

8 unchanged sentences

Note B ‑ Seasonal Aspects

The results of operations for the three months ended March 31, 2026 and March 31, 2025 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the three and six months ended June 30, 2026 and June 30, 2025 are not necessarily indicative of the results to be expected for the full year.

Note C ‑ Inventories

7 unchanged sentences

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 March 31, 2026, December 31, 2025 and March 31, 2025.

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, 2026, December 31, 2025 and June 30, 2025.

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:

March 31, 2026

June 30, 2026

December 31, 2025

March 31, 2025

June 30, 2025

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 .

For the three months ended March 31, 2026 and March 31, 2025, the Company recognized stock based compensation expense of $ 412 thousand and $ 467 thousand, respectively.

At March 31, 2026 and March 31, 2025, there was $ 2.3 million and $ 2.0 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 March 31, 2026 is expected to be recognized over the weighted average period of 1.8 years.

On March 5, 2026, the Company awarded 116,691 restricted stock units to employees.

The 2026 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 continues to serve as an employee, director or consultant of the Company on the vesting date.

For the three and six months ended June 30, 2026, the Company recognized stock based compensation expense of $ 463 thousand and $ 875 thousand, respectively, compared to stock based compensation expense of $ 495 thousand and $ 962 thousand for the same periods in the prior year.

At June 30, 2026 and June 30, 2025, there was $ 2.3 million and $ 2.8 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 June 30, 2026 is expected to be recognized over the weighted average period of 1.5 years.

During the six months ended June 30, 2026, the Company awarded 20,000 restricted stock units to directors and 116,691 restricted stock units to employees.

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

Director restricted stock units are subject to forfeiture, except for termination of services as a result of retirement, death or disability, if on the vesting date the director no longer holds a position with the Company.

All of the 2026 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 continues to serve as an employee, director or consultant of the Company on the vesting date.

Note F ‑ Segment Information

2 unchanged sentences

The CODM uses consolidated net sales and consolidated net income to assess financial performance and allocate resources.

As of and for the Three Months

Ended March 31, 2026

Reconciliation to net income:

Three Months Ended

Six Months Ended

June 30, 2026

June 30, 2025

June 30, 2026

June 30, 2025

Sporting Goods

Revenues from external customers

Cost of product sold

Total Net Sales

Sporting Goods Segment Operating Expenses:

Cost of products sold

Other operating expenses

Operating income (loss)

Interest expense, net

Provision (benefit) for Income Taxes

Net income (loss)

Depreciation and Amortization

As of and for the Three Months

Ended March 31, 2025

Unallocated corporate expense

Total Operating Income

Sporting Goods Segment Other Income (Expense):

Interest expense

Interest income

Total Income Before Income Taxes

Sporting Goods Segment provision for income taxes

Unallocated benefit for taxes

Total Net Income

Identifiable Assets

Sporting Goods

Revenues from external customers

Cost of product sold

Other operating expenses

Operating income (loss)

Interest expense, net

Provision (benefit) for Income Taxes

Net income (loss)

Depreciation and Amortization

Total Identifiable Assets

Other operating expenses primarily include selling, general and administrative expenses and tariff recovery attributable to the Sporting Goods segment.

Note G – Dividend Payment

3 unchanged sentences

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

On July 13, 2026, the Company paid a quarterly dividend of $ 0.1525 per common share to all shareholders of record on July 6, 2026.

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

Weighted average common shares outstanding

2 unchanged sentences

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 months ended March 31, 2026, 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, 2025, 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 six months ended June 30, 2026, 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, 2025, that are of significance, or potential significance to the Company.

In July 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2025-05, Financial Instruments – Credit Losses (Topic 326):

24 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 $ 608 thousand as of March 31, 2026.

The accrued liability amount attributable to warranties was $ 578 thousand as of June 30, 2026.

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 $ 5,056 thousand and $ 5,629 thousand as of March 31, 2026 and March 31, 2025, respectively, and $ 5,324 thousand and $ 6,708 thousand as of December 31, 2025 and December 31, 2024, respectively.

Contract Balances – Amounts relating to returns and customer allowances create contract liabilities, which were $ 5,134 thousand and $ 5,025 thousand as of June 30, 2026 and June 30, 2025, respectively, and $ 5,324 thousand and $ 6,708 thousand as of December 31, 2025 and December 31, 2024, respectively.

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

All Amounts in Thousands

March 31, 2026

March 31, 2025

Gross Sales by Channel:

10 unchanged sentences

Our leases have remaining lease terms of 1 year to 5 years.

As of March 31, 2026, the Company has not entered into any lease arrangements classified as a finance lease.

As of June 30, 2026, the Company has not entered into any lease arrangements classified as a finance lease.

We determine if an arrangement is a lease at inception.

11 unchanged sentences

Three Months Ended

Six Months Ended

All Amounts in Thousands

March 31, 2026

March 31, 2025

Lease Expense

4 unchanged sentences

Operating Lease – Operating Cash Flows

New ROU Assets – Operating Leases

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

All Amounts in Thousands

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 March 31, 2026 were as follows:

Future minimum lease payments under non-cancellable leases as of June 30, 2026 were as follows:

All Amounts in Thousands

1 unchanged sentence

Less imputed interest

Reported as of March 31, 2026

Reported as of June 30, 2026

Current operating lease liabilities

4 unchanged sentences

However, in the event of unexpected future developments, it is possible that the ultimate resolution of those matters, if unfavorable, may be material to the Company’s results of operations for any particular period, depending, in part, upon the size of the loss or liability imposed and the operating results for the applicable period.

Tariff Refunds

During fiscal 2025 and early fiscal 2026, the Company incurred import duties under tariffs imposed pursuant to the International Emergency Economic Powers Act (“IEEPA”).

On February 20, 2026, the U.S.

Supreme Court ruled that such tariffs were not authorized, and on March 4, 2026, the U.S.

Court of International Trade (“CIT”) ordered U.S.

Customs and Border Protection to refund certain tariffs collected under IEEPA.

The Company identified certain potential refunds of previously paid tariffs in accordance with the ruling by the CIT and we account for such refunds under the loss recovery framework in accordance with ASC Topic 410 when recovery is considered probable and reasonably estimable.

During the three months ended June 30, 2026, the Company deemed recovery of approximately $ 10.2 million to be probable, which recovery remained subject to administrative review and final liquidation of the underlying customs entries by U.S.

Customs and Border Protection.

During the three months ended June 30, 2026, the Company received and recorded $ 1.2 million in cash proceeds representing a partial approval of these tariff refund claims.

The Company recorded $ 9.0 million as a receivable within other current assets on the Consolidated Condensed Balance Sheets as of June 30, 2026.

In total, the Company recognized tariff benefits in its Statements of Operations of $ 10.2 million during the three months ended June 30, 2026, of which $ 9.9 million was recorded in tariff recovery within operating income and $ 0.3 million was recorded as interest income.

Subsequent to the end of the quarter, the Company received a payment of $ 9.0 million in relation to the recorded tariff receivable as of June 30, 2026.

Note M – Debt

5 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 March 31, 2026.

As of March 31, 2026, the outstanding principal amount of the term loan was $ 16.7 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 June 30, 2026.

As of June 30, 2026, the outstanding principal amount of the term loan was $ 14.9 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 March 31, 2026 was 23.6 % compared to 23.8 % for the same three month period last year.

The effective tax rate for the three months ending June 30, 2026 was 22.7 % compared to 25.8 % for the same three month period last year.

The effective tax rate for the first six months ending June 30, 2026 was 23.0 % compared to 24.7 % for the same period last year.

The effective tax rate for the three and six months ending June 30, 2026 decreased primarily due to refinements to expected state apportionment factors, which reduced state income tax expense.

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

39 unchanged sentences

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.

The Sporting Goods business competes in a variety of categories including basketball goals, archery, billiards, indoor and outdoor game recreation, safety and fitness products.

Strong brands and on-going investment in product development provide a solid foundation for building customer loyalty and continued growth.

9 unchanged sentences

The United States Government has made a series of announcements concerning tariffs enacted and/or proposed to be enacted on the importation of goods into the United States including a baseline tariff rate and individualized higher rates on many countries including countries that supply goods to the Company, including China from which the Company imports a substantial amount of goods.

Although the United States Supreme Court ruled that many of these tariffs were invalid, the availability of any refunds of such tariffs remains uncertain and the Government has initiated new tariffs and may impose other tariffs as well.

While the United States Supreme Court issued a ruling earlier this year striking down tariffs previously imposed under the International Emergency Economic Powers Act (“IEEPA”), the U.S.

government has since initiated new tariffs under Section 122 of the Trace Act.

Although the Company has recognized and received recoveries of certain IEEPA tariffs and may recover additional IEEPA claims as well, the Company still faces challenges from these newly imposed tariffs and uncertainties regarding international trade policy and practices including retaliatory tariffs and trade restrictions.

Additionally, hostilities in the Middle East have adversely affected shipping routes and oil prices and may have effects on the economy in general.

Tariffs, restrictions on trade, rising energy costs and disrupted shipping routes 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.

Tariffs, restrictions on trade, rising energy costs and disrupted shipping routes have in the past and may again in the future 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 energy costs, 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 March 31, 2026 are not necessarily indicative of the results to be expected for fiscal year 2026.

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, 2026 are not necessarily indicative of the results to be expected for fiscal year 2026.

Results of Operations

1 unchanged sentence

Three Months Ended

March 31, 2026

March 31, 2025

Six Months Ended

June 30, 2026

June 30, 2025

June 30, 2026

June 30, 2025

Cost of products sold

Selling, administrative and general expenses

Tariff recovery

Operating income

Revenue and Gross Margin

Sales increased 0.6% for the first quarter of 2026, compared with the same period in the prior year.

Sales increased primarily due to increases in our archery categories due to the recent Gold Tip acquisition and increased demand in our billiards and safety categories.

These increases were partially offset due to a decline in our outdoor and indoor game categories.

Gross margin increased to 30.7% for the first quarter of 2026 compared to 26.7% for the same period in 2025 primarily driven by lower fixed costs and favorable sales mix.

Sales increased 6.2% for the second quarter of 2026, compared with the same period in the prior year.

Sales increased largely due to increases in our archery categories, including the incremental contribution from our September 2025 acquisition of Gold Tip assets.

Net sales also benefited from increased demand in the safety, table tennis and basketball categories.

These increases were partially offset by lower sales in outdoor game categories.

For the six months ended June 30, 2026, net sales increased 3.3% compared with the same period in the prior year, driven by the same factors that impacted the second quarter.

Gross margin increased 146 basis points to 26.2% for the second quarter of 2026 compared to 24.7% for the same period in 2025, primarily driven by better absorption, operating leverage and a favorable sales mix.

For the six months ended June 30, 2026, gross margin increased to 28.4% compared to 25.7% for the same period in 2025.

Selling, General and Administrative Expenses

Selling, general and administrative expenses (SG&A) were $10.7 million for the first quarter of 2026 compared to $10.6 million for the same period in the prior year, an increase of $0.1 million or 1.5%.

SG&A as a percent of sales is 19.2% for the first quarter of 2026 compared with 19.1% for the same period in the prior year.

Provision (Benefit) for Income Taxes

The effective tax rate for the first three months of 2026 was 23.6% compared to 23.8% for the same period in the prior year.

Selling, general and administrative expenses (SG&A) were $12.5 million for the second quarter of 2026 compared to $10.2 million for the same period in the prior year, an increase of $2.2 million or 21.7%.

The increase in SG&A is largely driven by selling and marketing expenses related to recent acquisitions and an increase in variable compensation.

SG&A as a percent of sales is 21.6% for the second quarter of 2026 compared with 18.9% for the same period in the prior year.

For the six months ended June 30, 2026, SG&A were $23.2 million compared to $20.8 million for the same period in the prior year.

Tariff Recovery

During the three months ended June 30, 2026, the Company recognized $10.2 million of tariff recoveries related to the U.S.

Court of International Trade ruling stating importers who paid IEEPA tariffs were entitled to refunds plus interest.

The Company recognized approximately $9.9 million in operating income and $0.3 million of interest income related to the IEEPA recoveries.

Provision for Income Taxes

The effective tax rate for the three months ending June 30, 2026 was 22.7% compared to 25.8% for the same three month period last year.

The effective tax rate for the first six months ending June 30, 2026 was 23.0% compared to 24.7% for the same period last year.

The effective tax rate for the three and six months ending June 30, 2026 decreased primarily due to refinements to expected state apportionment factors, which reduced state income tax expense.

Financial Condition and Liquidity

Total debt at the end of the first three months of 2026 was $16.7 million, a decrease of $1.8 million from December 31, 2025.

Total debt as of June 30, 2026 was $14.9 million, a decrease of $3.6 million from December 31, 2025.

The following schedule summarizes the Company’s total debt:

1 unchanged sentence

Long term debt

As a percentage of stockholders’ equity, total debt was 9.5%, 10.7% and 14.1% at March 31, 2026, December 31, 2025, and March 31, 2025 respectively.

As a percentage of stockholders’ equity, total debt was 8.1%, 10.7% and 13.1% at June 30, 2026, December 31, 2025, and June 30, 2025 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.

4 unchanged sentences

The Company was in compliance with the debt covenants set forth in the Restated Credit Agreement as of March 31, 2026.

As of March 31, 2026, the outstanding principal amount of the term loan was $16.7 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 June 30, 2026.

As of June 30, 2026, the outstanding principal amount of the term loan was $14.9 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.

10 unchanged sentences

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 first quarter of 2026.

There have been no changes to the Company’s internal control over financial reporting that occurred since the beginning of the Company’s first quarter of 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

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 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

OTHER INFORMATION

2 unchanged sentences

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