ESCALADE INC

Previous wording

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

Current wording

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

Previous wording

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. 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. 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.

Current wording

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. 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.

Previous wording

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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

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. The following schedule summarizes the Company’s total debt:

Current wording

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:

Previous wording

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.

Current wording

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.

Previous wording

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 term loan and revolving facility have a maturity date of January 21, 2027.

Current wording

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.