IntrinsicIntrinsic
← All summaries

ESCALADE INC

ESCA
Financials & Chart →

Business Summary

Escalade, Incorporated operates in one business segment: Sporting Goods (Escalade Sports), competing in a variety of product categories including basketball goals, archery, indoor and outdoor game recreation and fitness products. The Company manufactures in the USA and imports products from South America and Asia, utilizing a number of contract manufacturers. Escalade is a leader in table tennis tables, residential in-ground basketball goals and in archery bows. The market for sporting goods is highly fragmented and intensely competitive, with a majority of the Company's products in markets experiencing low growth rates. Escalade is not aware of any other single company engaged in the same product lines or producing the same range of products, though competition exists for many products from larger competitors with substantially greater resources.

Escalade believes its long-term success depends on its ability to strengthen relationships with existing customers, attract new customers, be a reliable source of products, and develop new products that satisfy quality and price requirements. The Company has established relationships with major customers that allow it to bring new products to market cost-effectively while maintaining a diversified portfolio. Escalade has substantial manufacturing and import experience that enable it to be a reliable and low-cost supplier. The Company's strategic advantage also includes strong brands and barriers to entry in several niche markets. During 2025 and 2024, the Company had one customer that accounted for approximately 19% of the Company's revenues, and another customer which accounted for approximately 11% and 13% , respectively, of the Company's revenues.

Escalade generates revenue through the manufacture, import, and distribution of widely recognized sporting goods brands sold through major sporting goods retailers, specialty dealers, key on-line retailers, direct-to-consumer e-commerce, traditional department stores and mass merchants. Sales are based primarily on standard purchase orders and in most cases orders are shipped within the same month received. 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 are satisfied, generally with the transfer of control of goods at a point in time based on shipping terms. The Company does not have long-term contracts that are satisfied over time. Gross-to-net sales adjustments include returns, warranties, and customer allowances such as advertising subsidies, volume rebates and catalog allowances.

Escalade's product portfolio spans numerous categories under owned or distributed brands. In archery, brands include Bear Archery, Trophy Ridge, Gold Tip, Bee Stinger, Cajun Bowfishing, SIK, and BearX. Table tennis brands include STIGA and Ping-Pong. Basketball goal brands include Goalrilla, Goalsetter, Goaliath, Silverback, and Hoopstar. Pickleball brands include Onix and DURA. Play systems brands include Woodplay and Jack & June. Fitness brands include The STEP, Lifeline, Kettleworx, Natural Fitness, PER4M, USW, and adidas Fitness Safety. Game table brands (hockey and soccer) include Triumph, Atomic, American Legend, HJ Scott, and Air-Hockey. Water sports are under the RAVE brand. Billiard tables and accessories include American Heritage Billiards, Brunswick Billiards, Cue&Case, Lucasi, Mizerak, PureX, Rage, Players, Minnesota Fats, and Mosconi. Darting brands include Unicorn, Arachnid, Accudart, and DMI. Outdoor games include Victory Tailgate, Triumph, Zume Games, ACL, and AllCornhole. The Company has an agreement with STIGA Sports AB for the exclusive right and license to distribute and produce table tennis equipment under the brand name STIGA for North America.

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. The Gold Tip assets acquired at close included $1.5 million in trademarks and immaterial amounts of other assets, to be amortized over 20 years. In December 2025, Escalade acquired AllCornhole, a leading brand and supplier of cornhole bags and equipment for competitive cornhole play. The AllCornhole assets acquired at close included $0.4 million in trademarks and immaterial amounts of other assets, to be amortized over 20 years. These acquisitions, individually and in total, were not material to net sales, results of operations or total assets during the year ended December 31, 2025. The Company also 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. During 2024, the Company completed the sale of its Mexico facility for $6.6 million , receiving cash proceeds of $5.9 million with the remaining $0.7 million deposited in an escrow account, recognizing a gain of $3.9 million . The Company repurchased 2,515,750 shares of its common stock under its repurchase program for an aggregate price of $34,105,397 from inception through December 31, 2025. In February 2025, the Board of Directors increased the stock repurchase program to $20,000,000 . The quarterly cash dividend is currently $0.15 per common share.

Net sales decreased 4.5% in 2025 compared to 2024, with declines across multiple categories due to softer consumer demand, partially offset by improved demand in the archery, billiards, and fitness categories. Consolidated net sales were $240,158,000 in 2025 compared to $251,510,000 in 2024. Net income was $13,701,000 in 2025 compared to $12,986,000 in 2024, an increase of 5.5% on a consolidated basis. Diluted earnings per share were $0.99 in 2025 versus $0.93 in 2024. The overall gross margin increased to 26.9% in 2025 compared with 24.7% in 2024, favorably impacted by lower manufacturing costs due to a smaller operational footprint. Operating income was $18,727,000 in 2025 compared to $20,004,000 in 2024. Cash provided by operating activities was $31,014,000 in 2025 compared to $36,049,000 in 2024.

Business Outlook

A key growth vector is the strategy of acquiring companies or product lines that complement or expand existing product lines or provide expansion into new or emerging categories in sporting goods. Management seeks acquisitions that strengthen the Company's leadership in various product categories or provide entry into attractive new product categories. Significant synergies are achieved through assimilation of acquired product lines into the existing Company structure. The September 2025 acquisition of Gold Tip from Revelyst, Inc. strengthened the Company's market position in archery, and the December 2025 acquisition of AllCornhole added a leading brand in competitive cornhole play. The Company also continues to focus on organic growth of existing categories and new product development.

Another growth vector is the expansion of distribution channels, including growing the e-commerce business and continued expansion and development of the direct-to-consumer e-commerce distribution channel. The Company has historically sold a large percentage of its sporting goods products to mass merchandisers and has increasingly attempted to expand sales to specialty retailer and dealer markets and to on-line retailers. The Company's growth strategy also depends on its ability to grow its e-commerce business. Core components of the business development and growth strategy include investing in product innovation and developing strong brand names.

The overall gross margin increased to 26.9% in 2025 compared with 24.7% in 2024, favorably impacted by lower manufacturing costs due to a smaller operational footprint. Selling, general and administrative expenses were $43.6 million in 2025 compared to $43.3 million in 2024, an increase of $0.3 million or 0.7% , primarily related to CEO transition costs. SG&A as a percent of sales was 18.2% in 2025 compared with 17.2% in 2024. The effective tax rate for 2025 was 24.0% compared to 26.9% in 2024. Management stated that if economic conditions deteriorate, they will pursue cost reduction initiatives and consider realignment of infrastructure to match overhead and cost structure with sales levels dictated by current market conditions.

The Company expects 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. As of December 31, 2025, the Company had $52.9 million of availability on its senior secured revolving credit facility. The Company had no material commitments for capital expenditures as of December 31, 2025. In 2026, the Company has budgeted capital expenditures in the range of approximately $4.2 million to $5.2 million .

Research and development costs incurred during 2025 and 2024 were approximately $3.2 million and $3.2 million , respectively. Capital expenditures were $2,512,000 in 2025 compared to $2,038,000 in 2024. The Company paid dividends of $8,277,000 in 2025 and $8,306,000 in 2024. The Company repurchased $3,098,000 of stock in 2025 and $2,194,000 in 2024. The Board of Directors increased the stock repurchase program to $20,000,000 in February 2025. The quarterly cash dividend is currently $0.15 per common share. The Fifth Amendment to the Restated Credit Agreement 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.

Management identified several headwinds and constraints. General economic conditions, inflation, recessionary fears, rising interest rates, changes in the housing market and declining consumer confidence may impact the Company adversely. The Company's business is tied to general economic and industry conditions as demand for sporting goods depends largely on the strength of the U.S. economy. U.S. tariffs on goods imported into the U.S., particularly goods from China, have resulted in increased costs of goods purchased by the Company, which in turn may result in lower profitability if unable to offset through higher prices, or a decline in sales if customers do not accept price increases. The U.S. government's tariff policies, particularly as to China, Mexico and Canada, have fluctuated over the past year and created significant uncertainty. The Company also faces risks from disruptions in its supply chain due to circumstances beyond its control, such as work stoppages, port strikes, lack of availability of transportation, global instability, and attacks on shipping vessels.

The Company faces risks associated with sourcing and manufacturing outside of the United States, including complex customs laws, regulations, tax requirements, and trade regulations. The Company has key suppliers in China and numerous products sold are manufactured in China, subjecting the business to risks including political and social conditions, conflicts between China and the U.S., and the Uyghur Forced Labor Prevention Act. Changes in currency exchange rates and the value of the United States dollar can have a significant impact on earnings. The Company also noted that the occurrence of future pandemics or similar events and their ultimate magnitude is unpredictable, volatile and uncertain, and could result in material adverse effects.

Risk Factors

The Company derives a substantial portion of its revenue from a few significant customers; two major customers together accounted for 30% of consolidated gross sales in fiscal 2025, and the loss of either could materially affect results. The Company's business is subject to risks associated with sourcing and manufacturing outside the United States, particularly from China, and U.S. tariffs on goods imported from China have resulted in increased costs that may lower profitability if not offset by price increases. The Company faces risks related to product recalls and product liability; it voluntarily recalled certain wall-mounted basketball goals in 2022 that could detach and fall, and sales of such goals have been adversely impacted. The Company's goodwill balance was $42.3 million at December 31, 2025, all allocated to the Escalade Sports reporting unit, and while the quantitative impairment assessment as of September 1, 2025 indicated fair value exceeded carrying value, a triggering event was identified due to increased tariff-related costs, and any future deterioration could require impairment charges. The Company is currently transitioning to a new Interim Chief Executive Officer effective October 29, 2025, which may result in disruption to operations and diversion of management attention.

Management Priorities

Management's message emphasizes a focus on growing the Sporting Goods segment through organic growth of existing categories, strategic acquisitions, and new product development. The Company has successfully built a robust market presence in several niche markets within the sporting goods industry, a strategy heavily dependent on expanding the customer base, barriers to entry, strong brands, excellent customer service and a commitment to innovation. Management believes that key indicators in measuring the success of these strategies are revenue growth, earnings growth, new product introductions, and the expansion of channels of distribution. The Company completed two strategic acquisitions in 2025: Gold Tip in September and AllCornhole in December. Management also noted the completion of the discontinuance of Mexico operations and the Orlando, FL facility in 2024. The filing states that management cannot predict the full impact of general economic conditions, inflation, recessionary fears, rising interest rates, changes in the housing market and declining consumer confidence on the Company. 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. The Company has budgeted capital expenditures in the range of approximately $4.2 million to $5.2 million for 2026.

View Source Annual Report on SEC.gov ↗

References

  1. [1] Item 1, Business — General
  2. [2] Item 1, Business — General
  3. [3] Item 1, Business — General
  4. [4] Item 8, Note 15 — Acquisitions
  5. [5] Item 8, Note 15 — Acquisitions
  6. [6] Item 8, Note 1 — Nature of Operations and Summary of Significant Accounting Policies
  7. [7] Item 8, Note 1 — Nature of Operations and Summary of Significant Accounting Policies
  8. [8] Item 8, Note 1 — Nature of Operations and Summary of Significant Accounting Policies
  9. [9] Item 8, Note 1 — Nature of Operations and Summary of Significant Accounting Policies
  10. [10] Item 5, Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  11. [11] Item 5, Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  12. [12] Item 5, Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  13. [13] Item 1A, Risk Factors — If we are unable to pay quarterly dividends at intended levels
  14. [14] Item 7, MD&A — Overview
  15. [15] Item 8, Consolidated Statements of Operations
  16. [16] Item 8, Consolidated Statements of Operations
  17. [17] Item 8, Consolidated Statements of Operations
  18. [18] Item 8, Consolidated Statements of Operations
  19. [19] Item 7, MD&A — Overview
  20. [20] Item 8, Consolidated Statements of Operations
  21. [21] Item 8, Consolidated Statements of Operations
  22. [22] Item 7, MD&A — Results of Operations
  23. [23] Item 7, MD&A — Results of Operations
  24. [24] Item 8, Consolidated Statements of Operations
  25. [25] Item 8, Consolidated Statements of Operations
  26. [26] Item 8, Consolidated Statements of Cash Flows
  27. [27] Item 8, Consolidated Statements of Cash Flows
  28. [28] Item 7, MD&A — Results of Operations
  29. [29] Item 7, MD&A — Results of Operations
  30. [30] Item 7, MD&A — Selling, General and Administrative Expenses
  31. [31] Item 7, MD&A — Selling, General and Administrative Expenses
  32. [32] Item 7, MD&A — Selling, General and Administrative Expenses
  33. [33] Item 7, MD&A — Selling, General and Administrative Expenses
  34. [34] Item 7, MD&A — Results of Operations
  35. [35] Item 7, MD&A — Results of Operations
  36. [36] Item 7, MD&A — Provision for Income Taxes
  37. [37] Item 7, MD&A — Provision for Income Taxes
  38. [38] Item 7, MD&A — Financial Condition and Liquidity
  39. [39] Item 8, Note 6 — Borrowings
  40. [40] Item 7, MD&A — Capital Expenditures
  41. [41] Item 7, MD&A — Capital Expenditures
  42. [42] Item 8, Note 1 — Nature of Operations and Summary of Significant Accounting Policies
  43. [43] Item 8, Note 1 — Nature of Operations and Summary of Significant Accounting Policies
  44. [44] Item 8, Consolidated Statements of Cash Flows
  45. [45] Item 8, Consolidated Statements of Cash Flows
  46. [46] Item 8, Consolidated Statements of Cash Flows
  47. [47] Item 8, Consolidated Statements of Cash Flows
  48. [48] Item 8, Consolidated Statements of Cash Flows
  49. [49] Item 8, Consolidated Statements of Cash Flows
  50. [50] Item 5, Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
  51. [51] Item 1A, Risk Factors — If we are unable to pay quarterly dividends at intended levels
  52. [52] Item 8, Note 6 — Borrowings
  53. [53] Item 8, Note 6 — Borrowings
  54. [54] Item 1A, Risk Factors — The Company derives a substantial portion of its revenue from a few significant customers
  55. [55] Item 8, Note 5 — Acquired Intangible Assets and Goodwill
  56. [56] Item 7, MD&A — Financial Condition and Liquidity
  57. [57] Item 7, MD&A — Capital Expenditures
  58. [58] Item 7, MD&A — Capital Expenditures
  59. [59] Item 8, Consolidated Statements of Operations
  60. [60] Item 8, Consolidated Statements of Operations
  61. [61] Item 7, MD&A — Overview
  62. [62] Item 8, Consolidated Statements of Operations
  63. [63] Item 8, Consolidated Statements of Operations
  64. [64] Item 7, MD&A — Overview
  65. [65] Item 8, Consolidated Statements of Operations
  66. [66] Item 8, Consolidated Statements of Operations
  67. [67] Item 8, Consolidated Statements of Operations
  68. [68] Item 8, Consolidated Statements of Operations
  69. [69] Item 7, MD&A — Results of Operations
  70. [70] Item 7, MD&A — Results of Operations
  71. [71] Item 7, MD&A — Provision for Income Taxes
  72. [72] Item 7, MD&A — Provision for Income Taxes
  73. [73] Item 8, Consolidated Balance Sheets
  74. [74] Item 8, Consolidated Balance Sheets
  75. [75] Item 8, Note 6 — Borrowings
  76. [76] Item 8, Note 6 — Borrowings
  77. [77] Item 8, Consolidated Statements of Cash Flows
  78. [78] Item 8, Consolidated Statements of Cash Flows
  79. [79] Derived from Item 8, Consolidated Statements of Cash Flows
  80. [80] Item 8, Consolidated Statements of Operations
  81. [81] Item 8, Consolidated Statements of Operations
  82. [82] Item 8, Consolidated Statements of Operations
  83. [83] Item 7, MD&A — Sporting Goods
  84. [84] Item 7, MD&A — Sporting Goods
  85. [85] Item 7, MD&A — Sporting Goods
  86. [86] Item 7, MD&A — Sporting Goods

Analysis on 6/21/2026