Escalade, Inc. President and CEO Patrick Griffin reported that the maker and marketer of a portfolio of brands in the archery products and indoor and outdoor games segments delivered a solid second quarter with sales up in the mid-single digits and gross margins posted improvement year-over-year (y/y). Growth was said to be “broad based” in the quarter, led by strength in the safety, table tennis and basketball categories, along with continued momentum in archery.

Escalade’s brands include Goalrilla in-ground basketball hoops; Stiga tennis tables and accessories; Gold Tip Archery, Bear Archery and archery equipment; Brunswick Billiards tables and accessories; Accudart darting; Onix pickleball; Lifeline fitness products; and Rave Sports water recreation products.

Total net sales increased 6.2 percent y/y to $57.7 million in the second quarter, said to be primarily driven by increases in the archery categories, where Griffin said results benefited from new product introductions and the accretive contribution of the Gold Tip acquisition completed September 2025. Net sales also reportedly benefited from increased demand in the safety, table tennis and basketball categories. These increases were partially offset by lower sales in outdoor games categories.

Escalade reported second quarter gross margin of 26.2 percent of sales, an increase of 146 basis points versus the prior-year Q2 period, primarily driven by better absorption, operating leverage and a favorable sales mix.

“The gross margin improvement reflected lower fixed costs and a favorable sales mix,” continued Griffin. “Reported operating income and EBITDA also included a one-time, pre-tax benefit of approximately $10.2 million from the recovery of tariff costs incurred in prior quarters, which had weighed on our reported profitability when they were originally paid.”

The CEO said they expect to use some of  the refunds to help offset higher costs driven by increased freight rates, commodity inflation, and additional new tariffs. The company also plans to invest in trade and consumer promotions, accelerate product innovation, and capital improvements at its facilities in an effort to increase the efficiency of its operations.

When asked by an analyst about raising prices in the face of rising transportation costs and other inputs, Griffin said they felt that their pricing is “pretty good right now with the current environment.” He also said they are hoping that the freight will be transitory with the geopolitical situations that winds down – hopefully.

“But we feel like the – some of the tariff refund we have – we can absorb some of that with promotional efforts on the pricing side,” he suggested. “So we don’t expect to change our pricing here in the near term.”

He reiterated that the company would absorb some of the additional freight expenses with the refund, and then would continue with maybe some incremental promotions in the third and fourth quarters and support that with some of the tariff refunds as well.

Net income for the second quarter was $9.4 million, or 68 cents per diluted share, compared to net income of $1.8 million, or 13 cents per diluted share, for the second quarter in 2025. Excluding the tariff recovery, second quarter 2026 net income was $2.6 million, or 19 cents per diluted share.

Earnings before interest, taxes, depreciation, and amortization (EBITDA) was reported at $13.2 million in the second quarter. Excluding the tariff recovery, second quarter 2026 EBITDA was $4.7 million, an increase of $0.8 million versus $3.9 million in the prior-year period, which did not contain any tariff recovery figures.

Balance Sheet Summary
Total cash and equivalents as of June 30, 2026 was $16.4 million, while availability on the senior secured revolving credit facility maturing in 2027 was $56.7 million.

Total debt at the end of the quarter was $14.9 million, down from $22.0 million at the end of the second quarter last year, and $18.5 million at the end of 2025.

“We continued to strengthen our balance sheet during the quarter, reducing total debt to $14.9 million and ending the period in a net cash position,” Griffin noted. “This financial flexibility allows us to continue pursuing our robust capital allocation strategy, which includes a growing pipeline of potential accretive acquisition opportunities. Disciplined capital allocation remains central to our value-creation strategy, and we are focused on generating attractive returns on invested capital and delivering long-term value for our shareholders.”

Given the low-cost fixed rate bank debt and the current interest rate environment, Griffin said the company continues to benefit from favorable cash arbitrage.

“Our consistent free cash flow and strong balance sheet also position us to supplement organic growth with M&A,” Griffin stated. “We remain focused on strategic accretive acquisitions that enhance our existing platforms, expand our presence in attractive categories and strengthen our competitive positioning.”

“We are encouraged by our growing pipeline of acquisition opportunities that meet these criteria,” he said.

During the second quarter of 2026, the company generated $8.7 million in cash flow from operations, a decrease of $4.6 million relative to the second quarter of last year. The decline in cash flow from operations was primarily attributable to an increase in cash flow used for working capital purposes.

Escalade announced a quarterly dividend of $0.1525 per share to be paid to all shareholders of record on October 6, 2026 and payable on October 13, 2026.

Outlook
Griffin said the company remained confident in its ability to drive continued top-line growth in the second half of the year.

“While elevated energy costs and broader inflationary pressures will continue to weigh on consumer spending, we believe our investments in innovation and new products, operating leverage, and disciplined operational execution position us to navigate ongoing macroeconomic headwinds,” he said.

Looking ahead to the second half of 2026, we remain mindful of potential macroeconomic headwinds, including inflationary pressures such as the higher energy costs and elevated prices across the broader economy, which could weigh on consumer spending while creating incremental pressure on our cost structure.

“That said, we believe our business is well positioned to manage through this environment,” Griffin commented.

“Our planned new product launches, the operating leverage we have built into the business and our continued focus on execution should enable us to keep growing our top line profitably despite ongoing macroeconomic uncertainty,” he continued on the analyst conference call. “During the second quarter, we continued to build our pipeline of fresh and innovative new products across our portfolio.”

  • Onix Pickleball reportedly introduced several new pickleball paddles during the second quarter, including the Hype Lite pickleball paddle, which builds on earlier Hype launch. We also launched the Adapt Max pickleball paddle with MaxRev technology for enhanced spin.
  • ESCA also expanded product offerings within its basketball category, introducing the Goalrilla Hydro Dunk pool hoop, which is said to bring the brand’s pro game basketball engineering poolside.
  • Within Billiards, the company launched the Lucasi Halo carbon fiber shaft during the second quarter.

Griffin concluded, “In closing, our second quarter provided further validation of our strategy to deliver profitable growth even in the face of a difficult and uncertain macroeconomic environment. We delivered margin expansion while improving our working capital efficiency and strengthening our balance sheet. Looking ahead to the second half of 2026 and beyond, we expect our operating model, robust capital allocation, strong execution and financial flexibility to drive continued growth, generating long-term value for our shareholders.”

Image courtesy Gold Tip Archery/Facebook