Escalade Net Sales Fall 15% for Quarter; Rise 2% for Year

Escalade, Inc. announced that fourth quarter net sales declined 15% to $57.6 million due primarily to a shift in timing in sporting goods sales; however, full year net sales increased to a record $220.7 million, a 2% gain over the comparable year ago period. Fourth quarter net income declined 85% to $946,000 due to $5.21 million of non-cash expenses recorded to recognize excess inventory, investment write downs, and additional restructuring charges including severance and legal fees, all within the Martin Yale Group’s office products operations. Full year net income declined 47% to $7.83 million or 60 cents per share. Both the quarter and the full year results were significantly affected by higher effective tax rates and costs associated with compliance with Sarbanes-Oxley legislation. During the year, bank debt was reduced nearly $10 million after using cash of $1.7 million for dividends and stock repurchases; reflecting cash flow well above net income.

As in the past, the highly seasonal nature of the sporting goods business makes quarter to quarter comparisons difficult. Escalade Sports net sales of sporting goods products declined 19% to $37.3 million for the quarter; however, full year net sales increased to $141.6 million a 5% gain over the prior year’s comparable period. Net income was down 13% for the quarter, but up 11% for the year. Substantial progress continues to be made in the ongoing operations cost reduction program. Customers inventories are at relatively overall normal levels so the first half of 2005 may not see gains similar to 2004 when their inventory levels were lower; however, improved product offerings and expanding customer base make Escalade cautiously optimistic that 2005 will be another good year for sporting goods. Escalade Sports was awarded the coveted Sears Partners in Progress Award for the sixth straight year for its 2004 performance.

Escalade’s European (50% owned) sporting goods joint ventures, Stiga and Escalade International continued to contribute to earnings, collectively providing 6 cents per share for the full year.

ESCALADE, INCORPORATED AND SUBSIDIARIES
                 CONSOLIDATED CONDENSED STATEMENTS OF INCOME
              (Unaudited, In Thousands Except Per Share Amounts)


                               3 Months Ended          12 Months Ended
                       25 Dec 2004   27 Dec 2003   25 Dec 2004  27 Dec 2003

    NET SALES             $ 57,588    $ 67,341      $ 220,709    $ 216,268

    OPERATING EXPENSES
      Cost of goods sold    40,010     50,994        158,391      154,365
      Selling and
       administrative       12,656      8,639         43,070       40,907
      Restructuring Costs      954         --          2,366           --
      Goodwill impairment
       loss                     --         --          1,312           --

    OPERATING INCOME         3,968      7,708         15,570       20,996

    OTHER INCOME (EXPENSE)
    Interest expense          (345)      (482)        (1,772)      (2,282)
    Other income (expense)    (527)     1,425             19        2,509

    INCOME BEFORE INCOME
     TAXES                   3,096      8,651         13,817       21,223

    PROVISION (BENEFIT)
     FOR INCOME TAXES        2,150      2,186          5,990        6,373

    NET INCOME                $946     $6,465         $7,827      $14,850

    PER SHARE DATA
      Basic earnings per
       share                $ 0.07      $ 0.5         $ 0.60       $ 1.15
      Diluted earnings
       per share            $ 0.07     $ 0.49         $ 0.59       $ 1.13
      Average shares
       outstanding          13,031     12,850         12,980       12,937