Escalade, Incorporated reported that net sales the first quarter of 2004 ended March 20 increased 21% to $32,250,000 and net income moved from a breakeven to a $598,000 profit or nine cents per share.

In his message to shareholders, C. W. Reed, President and CEO offered the following commentary on the first quarter results:

“Net sales of sporting goods increased 40% to $15,689,000 due primarily to the inclusion of the archery acquisition completed in the second quarter of 2003, increased demand of basketball products, and the return to more normal first quarter purchase levels from our customers as their 2003 year end inventories declined from the excesses held at 2002 year end. Net income at Sports moved from a loss in the first quarter of 2003 to a level that accounts for the entire gain in this year's consolidated first quarter results. The increased income is due equally to the increased sales and to a successful program to substantially reduce factory operating expenses. Escalade Sports was awarded a fifth consecutive Sears 'Partners in Progress' award for its 2003 performance. Our outlook for Sports remains optimistic, however, we are still in the process of finalizing product placement decisions with our customers and we are facing significant raw material increases that must be negotiated into our selling prices with our customers.

“During the quarter, we paid our first annual dividend of $.24 per share. We are continuing to evaluate acquisitions as well as other means of enhancing shareholder value.”

    (Unaudited, In Thousands Except Per Share Amounts)

                           3 Months Ended               12 Months Ended
                   20 March 2004  22 March 2003   20 March 2004  22 March 2003

    NET SALES          $35,250        $29,103        $227,875       $167,053

      Cost of
       goods sold       24,518         18,659         159,223        117,489
      Selling and
       administrative    9,240          9,932          46,675         31,279

    OPERATING INCOME     1,492            512          21,977         18,285

      Interest expense    (365)          (448)         (2,200)        (1,277)
      Other income
       (expense)           (18)           (53)          2,543             52

     INCOME TAXES        1,109             11          22,320         17,062

     FOR INCOME TAXES      511              4           6,880          5,847

    NET INCOME            $598             $7         $15,440        $11,213

      Basic earnings
       per share         $0.09          $0.00           $2.39          $1.72
      Diluted earnings
       per share         $0.09          $0.00           $2.35          $1.68