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PRE-MKT · 06:25 ET
Market ClerkRecap
Tue Oct 27 · pre-market1 signal on Oct 26140 insider buys this week · $73.9MCIRO short report next: Oct 31The week ahead

ESCA

ESCALADE INC
NASDAQ · CONSUMER DISCRETIONARY · SPORTING & ATHLETIC GOODS, NEC
18.65
+0.11 +0.59%
USD · close Oct 26
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Work order
47
WATCH · shorts 47
Insiders, 90 days
0
no open-market filings in 90 days
Congress, 90 days
0 / 0
no disclosures naming it
Big money
0 / 15
none of the tracked funds disclose it
Calls on record
0
nobody we score has called it yet
MKT CAP $256.7MP/E 11.2DIV YIELD —FCF YIELD 10.10%REV TTM $243.8M +1.0%NET INCOME $23.1M +80.1%NET DEBT $14.2M52W 11.41 – 22.60SEC XBRL · TTM TO Invalid Date

How ESCA rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
42%
of sentences unchanged
Added
175
new sentences
Dropped
198
sentences removed
Length
−929
words, now 15,873

New in FY2025

  • Forward-Looking Statements This report contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 3b-6 promulgated thereunder.
  • These risks include, but are not limited to: Escalade’s ability to achieve its business objectives; Escalade’s plans and expectations surrounding the transition to its new Chief Executive Officer and all potential related effects and consequences; Escalade’s ability to successfully implement actions to lessen the potential impacts of tariffs, a potential trade war with China and other trade restrictions applicable to our products and raw materials, including impacts on the costs of producing our goods, importing products and materials into our markets for sale, and on the pricing of our products; our international operations, including any related to political uncertainty and geopolitical tensions; Escalade’s ability to successfully achieve the anticipated results of strategic transactions, including the integration of the operations of acquired assets and businesses and of divestitures or discontinuances of certain operations, assets, brands, and products; the continuation and development of key customer, supplier, licensing and other business relationships; Escalade’s ability to protect its intellectual property; Escalade’s ability to develop and implement our own direct to consumer e-commerce distribution channel; the impact of competitive products and pricing; product demand and market acceptance; new product development; Escalade’s ability to successfully negotiate the shifting retail environment and changes in consumer buying habits; the financial health of our customers; disruptions or delays in our business operations, including without limitation disruptions or delays in our supply chain, arising from political unrest, war, terrorist attacks, labor strikes, natural disasters, public health crises such as the coronavirus pandemic, and other events and circumstances beyond our control; the evaluation and implementation of remediation efforts designed and implemented to enhance the Company’s control environment; the potential identification of one or more additional material weaknesses in the Company’s internal control of which the Company is not currently aware or that have not yet been detected; Escalade’s ability to control costs, including managing inventory levels; general economic conditions, including inflationary pressures; fluctuation in operating results; changes in foreign currency exchange rates; changes in the securities markets; continued listing of the Company’s common stock on the NASDAQ Global Market; the Company’s inclusion or exclusion from certain market indices; Escalade’s ability to obtain financing, to maintain compliance with the terms of such financing and to manage debt levels; the availability, integration and effective operation of information systems and other technology, and the potential interruption of such systems or technology; the potential impact of actual or perceived defects in, or safety of, our products, including any impact of product recalls or legal or regulatory claims, proceedings or investigations involving our products; risks related to data security of privacy breaches; the potential impact of regulatory claims, proceedings or investigations involving our products; Escalade’s use of estimates in its financial reporting as well as in its forward looking statements; and other risks detailed from time to time in Escalade’s filings with the Securities and Exchange Commission.
  • In September 2025, Escalade acquired the assets of Gold Tip, a leading brand of products for target archery and bow and crossbow hunting from Revelyst, Inc., strengthening the Company’s market position in archery.
  • In December 2025, Escalade acquired AllCornhole, a leading brand and supplier of cornhole bags and equipment for competitive cornhole play.
  • Consistent with that philosophy, the Company completed the discontinuance of its Mexico operations, sale of its Mexican facilities, discontinuance of its Orlando, FL operations and terminated its long-term lease for the Orlando, FL facility in 2024.
  • The following table sets forth the annual percentage change in revenues and net income over the past two years: 2025 2024 Net sales Sporting Goods (4.5 %) (4.6 %) Consolidated (4.5 %) (4.6 %) Net income Sporting Goods (1.0 %) 72.6 % Consolidated 5.5 % 32.1 % General economic conditions, inflation, recessionary fears, rising interest rates, changes in the housing market and declining consumer confidence may impact the Company adversely.
  • Due to the above circumstances and as described generally in this Form 10-K, the Company’s results of operations for the 2025 fiscal year are not necessarily indicative of the results to be expected for fiscal year 2026.
  • Results of Operations The following schedule sets forth certain consolidated statement of operations data as a percentage of net sales: 2025 2024 Net sales 100.0 % 100.0 % Cost of products sold 73.1 % 75.3 % Gross margin 26.9 % 24.7 % Selling, administrative and general expenses 18.2 % 17.2 % Amortization 0.9 % 1.1 % Gain on sale of assets held - (1.6 %) Operating income 7.8 % 8.0 % Revenue and Gross Margin Net sales decreased 4.5% in 2025 compared to 2024.
  • The Company recognized declines in sales across multiple categories due to softer consumer demand, partially offset by improved demand in the archery, billiards, and fitness categories.
  • The overall gross margin increased to 26.9% in 2025 compared with 24.7% in 2024.
  • Gross margins were favorably impacted by lower manufacturing costs due to a smaller operational footprint, when compared to the prior-year period.
  • Selling, General and Administrative Expenses Selling, general and administrative expenses (SG&A) were $43.6 million in 2025 compared to $43.3 million in 2024, an increase of $0.3 million or 0.7%.
  • The increase in SG&A was primarily related to CEO transition costs incurred during 2025.
  • SG&A as a percent of sales is 18.2% in 2025 compared with 17.2% in 2024.
  • Provision for Income Taxes The effective tax rate for 2025 and 2024 was 24.0% and 26.9%, respectively.
  • The 2025 effective tax rate is higher than the federal statutory rate primarily due to the impact of state taxes and nondeductible expenses.
  • Sporting Goods Net sales, operating income, and net income for the Sporting Goods segment for the two years ended December 31, 2025 were as follows: In Thousands 2025 2024 Net sales $ 240,158 $ 251,510 Operating income 21,346 23,088 Net income 14,970 15,128 Net sales decreased 4.5% in 2025 compared to 2024.
  • Gross margin in 2025 was 26.9% compared to 24.7% in 2024.
  • Operating income, as a percentage of net sales, decreased to 8.9% in 2025 compared to 9.2% in 2024.
  • Financial Condition and Liquidity The current ratio, a basic measure of liquidity (current assets divided by current liabilities), for 2025 was 4.3, compared to 3.9 in 2024.
  • Receivable levels decreased to $46.3 million in 2025 compared with $48.8 million in 2024 as a result of lower sales.
  • Net inventory decreased $7.5 million to $68.5 million in 2025 from $76.0 million in 2024, due to continued efforts to right size our on hand inventory.
  • Trade accounts payable and accrued liabilities decreased $4.1 million to $22.8 million from $26.9 million in 2024.
  • During 2025, the Company’s maximum borrowings under its primary revolving credit lines and overdraft facility totaled $27.0 million compared to $58.7 million in 2024.
  • The overall effective interest rate in 2025 was 3.7% compared to the effective rate of 5.4% in 2024.
  • Total debt at the end of the Company’s 2025 fiscal year was $18.5 million.
  • On October 11, 2024, the Company entered into the Fifth Amendment to the 2022 Restated Credit Agreement.
  • This amendment eliminated the fixed charge coverage ratio covenant and related provisions.
  • The 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 December 31, 2025.
  • As of December 31, 2025, the outstanding principal amount of the term loan was $18.5 million and total amount drawn under the Revolving Facility was zero.
  • The Company believes cash generated from its projected 2026 operations and the commitment of borrowings from its primary lender will provide it with sufficient cash flows for its operations.
  • The Company expects cash generated from 2026 and Q1 2027 operations will be sufficient to pay the remaining term loan balance of $11.3 million due on January 21, 2027.
  • It is possible that if economic conditions deteriorate, this could have adverse effects on the Company’s ability to operate profitably during fiscal year 2026.
  • Contractual Obligations The following schedule summarizes the Company’s material contractual obligations as of December 31, 2025: Amounts in thousands Total 2026 2027 2028 2029 2030 Thereafter Debt(1) $ 18,452 $ 7,143 $ 11,309 $ - $ - $ - $ - Future interest payments(1) - - - - Operating leases 1,447 - Minimum payments under purchase, royalty and license agreements 8,883 1,957 5,621 - - Total $ 29,392 $ 10,122 $ 17,571 $ $ $ $ - Note: (1) Assumes that the Company will not increase borrowings under its long-term credit agreements, the fixed term loan rate of 2.97% was used to calculate future interest payments.
  • Of the total recorded goodwill of $42.3 million at December 31, 2025, the entire amount was allocated to the Escalade Sports reporting unit.
  • The results of the quantitative impairment assessment of the Escalade Sports reporting unit indicated that the fair value of the reporting unit was greater than the carrying value as of September 1, 2025.
  • The Company performed a qualitative assessment for the interim period from September 1, 2025 to December 31, 2025.
  • The results of the qualitative impairment assessment indicated that it was not “more likely than not” that the fair value of the reporting unit was less than the carrying value as of December 31, 2025.
  • Capital Expenditures As of December 31, 2025, the Company had no material commitments for capital expenditures.

and 135 more.

Gone since FY2024

  • Forward-Looking Statements This report contains statements that we believe are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Rule 175 promulgated thereunder, and Section 21E of the Securities Exchange Act of 1934, as amended, and Rule 3b-6 promulgated thereunder.
  • These risks include, but are not limited to: Escalade’s ability to achieve its business objectives; Escalade’s ability to successfully achieve the anticipated results of strategic transactions, including the integration of the operations of acquired assets and businesses and of divestitures or discontinuances of certain operations, assets, brands, and products; the continuation and development of key customer, supplier, licensing and other business relationships; Escalade’s plans and expectations surrounding the transition to its new Chief Executive Officer and all potential related effects and consequences; Escalade’s ability to develop and implement our own direct to consumer e-commerce distribution channel; the impact of competitive products and pricing; product demand and market acceptance; new product development; Escalade’s ability to successfully negotiate the shifting retail environment and changes in consumer buying habits; the financial health of our customers; disruptions or delays in our business operations, including without limitation disruptions or delays in our supply chain, arising from political unrest, war, labor strikes, natural disasters, public health crises such as the coronavirus pandemic, and other events and circumstances beyond our control; the evaluation and implementation of remediation efforts designed and implemented to enhance the Company’s control environment; the potential identification of one or more additional material weaknesses in the Company’s internal control of which the Company is not currently aware or that have not yet been detected; Escalade’s ability to control costs, including managing inventory levels; Escalade’s ability to successfully implement actions to lessen the potential impacts of tariffs and other trade restrictions applicable to our products and raw materials, including impacts on the costs of producing our goods, importing products and materials into our markets for sale, and on the pricing of our products; our international operations, including any related to political uncertainty and geopolitical tensions; general economic conditions, including inflationary pressures; fluctuation in operating results; changes in foreign currency exchange rates; changes in the securities markets; continued listing of the Company’s common stock on the NASDAQ Global Market; the Company’s inclusion or exclusion from certain market indices; Escalade’s ability to obtain financing, to maintain compliance with the terms of such financing and to manage debt levels; the availability, integration and effective operation of information systems and other technology, and the potential interruption of such systems or technology; the potential impact of actual or perceived defects in, or safety of, our products, including any impact of product recalls or legal or regulatory claims, proceedings or investigations involving our products; risks related to data security of privacy breaches; the potential impact of regulatory claims, proceedings or investigations involving our products; and other risks detailed from time to time in Escalade’s filings with the Securities and Exchange Commission.
  • Consistent with that philosophy, the Company completed the discontinuance of its Mexico operations and sale of its Mexican facilities in 2024.
  • The following table sets forth the annual percentage change in revenues and net income over the past two years: 2024 2023 Net sales Sporting Goods (4.6% ) (16.0% ) Consolidated (4.6% ) (16.0% ) Net income Sporting Goods 72.6 % (45.6% ) Consolidated 32.1 % (45.4% ) General economic conditions, inflation, recessionary fears, rising interest rates, changes in the housing market and declining consumer confidence may impact the Company adversely.
  • Due to the above circumstances and as described generally in this Form 10-K, the Company’s results of operations for the 2024 fiscal year are not necessarily indicative of the results to be expected for fiscal year 2025.
  • Results of Operations The following schedule sets forth certain consolidated statement of operations data as a percentage of net sales: 2024 2023 Net sales 100.0 % 100.0 % Cost of products sold 75.3 % 76.6 % Gross margin 24.7 % 23.4 % Selling, administrative and general expenses 17.2 % 15.7 % Amortization 1.1 % 0.9 % Gain on sale of assets held (1.6 %) - Operating income 8.0 % 6.8 % Revenue and Gross Margin Net sales decreased 4.6% in 2024 compared to 2023.
  • The Company recognized declines in sales across multiple categories due to softer consumer demand, partially offset by improved demand in the archery, table tennis, and fitness categories.
  • The overall gross margin increased to 24.7% in 2024 compared with 23.4% in 2023.
  • Gross margins were favorably impacted by lower manufacturing and logistics costs.
  • Selling, General and Administrative Expenses Selling, general and administrative expenses (SG&A) were $43.3 million in 2024 compared to $41.5 million in 2023, an increase of $1.8 million or 4.4%.
  • The increase in SG&A was primarily related to increased professional service costs during 2024.
  • SG&A as a percent of sales is 17.2% in 2024 compared with 15.7% in 2023.
  • Provision for Income Taxes The effective tax rate for 2024 and 2023 was 26.9% and 21.3%, respectively.
  • The 2023 effective tax rate was slightly higher than the federal statutory rate primarily due to the impact of state taxes partially offset by captive insurance premiums being tax exempt and federal income tax credits.
  • Sporting Goods Net sales, operating income, and net income for the Sporting Goods segment for the two years ended December 31, 2024 were as follows: In Thousands 2024 2023 Net sales $ 251,510 $ 263,566 Operating income 23,088 17,496 Net income 15,128 8,767 Net sales decreased 4.6% in 2024 compared to 2023.
  • Gross margin in 2024 was 24.7% compared to 23.4% in 2023.
  • Operating income, as a percentage of net sales, increased to 9.2% in 2024 compared to 6.6% in 2023.
  • Financial Condition and Liquidity The current ratio, a basic measure of liquidity (current assets divided by current liabilities), for 2024 was 3.9, compared to 4.4 in 2023.
  • Receivable levels decreased to $48.8 million in 2024 compared with $50.0 million in 2023 as a result of lower sales.
  • Net inventory decreased $16.5 million to $76.0 million in 2024 from $92.5 million in 2023, due to continued efforts to right size our on hand inventory.
  • Trade accounts payable and accrued liabilities increased $1.8 million to $26.9 million from $25.1 million in 2023.
  • During 2024, the Company’s maximum borrowings under its primary revolving credit lines and overdraft facility totaled $58.7 million compared to $100.6 million in 2023.
  • The overall effective interest rate in 2024 was 5.4% compared to the effective rate of 6.3% in 2023.
  • Total debt at the end of the Company’s 2024 fiscal year was $25.6 million.
  • The October 11, 2024 amendments also eliminated the fixed charge coverage ratio covenant and related provisions.
  • The amendments 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 December 31, 2024.
  • As of December 31, 2024, the outstanding principal amount of the term loan was $25.6 million and total amount drawn under the Revolving Facility was zero.
  • The Company believes cash generated from its projected 2025 operations and the commitment of borrowings from its primary lender will provide it with sufficient cash flows for its operations.
  • It is possible that if economic conditions deteriorate, this could have adverse effects on the Company’s ability to operate profitably during fiscal year 2025.
  • Contractual Obligations The following schedule summarizes the Company’s material contractual obligations as of December 31, 2024: Amounts in thousands Total 2025 2026 – 2027 2028 – 2029 Thereafter Debt(1) $ 25,595 $ 7,143 $ 18,452 $ - $ - Future interest payments(1) 1,264 - - Operating leases 1,347 - Minimum payments under purchase, royalty and license agreements 12,777 2,747 8,725 1,305 - Total $ 40,983 $ 11,050 $ 28,563 $ 1,370 $ - Note: (1) Assumes that the Company will not increase borrowings under its long-term credit agreements, the fixed term loan rate of 2.97% was used to calculate future interest payments.
  • Of the total recorded goodwill of $42.3 million at December 31, 2024, the entire amount was allocated to the Escalade Sports reporting unit.
  • The results of the quantitative impairment assessment of the Escalade Sports reporting unit indicated that the fair value of the reporting unit was greater than the carrying value as of November 1, 2024.
  • Capital Expenditures As of December 31, 2024, the Company had no material commitments for capital expenditures.
  • In 2025, the Company estimates capital expenditures to be approximately $2.5 million.
  • 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 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 Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of the end of the period covered by this report.
  • Based on the foregoing, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were not effective because of the material weakness in internal control over financial reporting described below in Management’s Report on Internal Control over Financial Reporting.
  • See also, “Risk Factors – Legal, Tax, Accounting and Regulatory Risks.” 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.
  • The management of Escalade assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024.

and 158 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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