Escalade’s Q2 Sporting Goods Sales Climb 9%

Escalade, Inc. reported net income for the quarter reached $1.9 million, or 15 cents a share, against earnings of $366,000, or 3 cents, a year ago. Revenues increased slightly to $35.7 million from $35.6 million a year ago.

Increased profitability is a direct result of improved margins, operational improvements and reduced interest costs.

For the first half of 2010, net income is $2.7 million or $0.21 per share compared to a net loss of $.1 million or $(0.01) per share.

Revenues from the Sporting Goods business were up 9% in both the first and second quarters compared to the same quarters last year. Increases in consumer spending and new product distribution are driving sales increases. Management believes improved sales in the Sporting Goods segment will continue through the remainder of the year.

Compared to last year, revenues from the Office Products business declined 17% and 15% for the second quarter and first half of 2010, respectively.

Excluding the effects of changes in the currency exchange rates, revenues declined 15.4% and 15.9%, for the second quarter and first half of 2010, respectively. Financial uncertainty in several key markets in Europe, particularly Spain, Germany and the UK, has negatively impacted customer sentiment and slowed recovery. In addition, many European governments have enacted significant budget cuts which could further impact sales. North America experienced similar decreases in both government and commercial sales channels. The Company will continue with new product launches to help achieve future growth; however, Management expects the challenging sales environment in the Office Product segment to continue through the remainder of 2010.

The overall gross margin ratios for the second quarter and first half of 2010 were 33.3% and 33.6%, respectively, compared to 31.0% and 31.2%, respectively, for same periods last year. Management expects gross margins for the remainder of 2010 to exceed prior year.

Compared to the same periods last year, consolidated selling, general and administrative (“SG&A”) costs decreased 7.8% in the second quarter and 10.9% in the first half of 2010. The Company continues to identify and implement cost savings initiatives while increasing strategic investments in product development and brand marketing.

“We are pleased to announce our fifth consecutive quarterly profit, including EPS of $0.15 for the second quarter, 2010,” said Robert J. Keller, President and Chief Executive Officer of Escalade, Inc. “We are committed to our strategy of product innovation, brand marketing, and expense management to ensure all business segments are achieving sustainable top line sales growth and profitability into the future.”

Escalade sporting goods division makes pool tables, table tennis tables, game tables, basketball systems and wood playsets, Its sports brands include: Goalrilla, Goaliath, Silverback, Stiga, Mizerak, Murrey Billiards, Mosconi Billiards, The Black Widow, ChildLife Harvard Game, Murrey Game, Accudart, Bear Archery, Fred Bear, Jennings Archery, The Step and US Weight. It also owns a home furnishings business.

     ESCALADE, INCORPORATED AND SUBSIDIARIES
             CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
            (Unaudited, In Thousands Except Per Share Amounts)
                      Three Months                        Twelve Months
                          Ended       Six Months Ended        Ended
                    —————-  —————-  ——————
                    10 July  11 July  10 July  11 July  10 July   11 July
                      2010     2009     2010     2009     2010      2009
                    ——-  ——-  ——-  ——-  ——–  ——–
NET SALES           $35,737  $35,641  $60,906  $60,599  $116,306  $134,323
OPERATING EXPENSES
   Cost of goods
    sold             23,828   24,579   40,444   41,675    81,020    99,795
   Selling and
    administrative    8,068    8,748   14,929   16,771    27,643    35,034
   Long-lived asset
    impairment           —       —       —       —        —     2,623
   Amortization         391      940      674    1,407     1,532     2,174
                    ——-  ——-  ——-  ——-  ——–  ——–
OPERATING INCOME
 (LOSS)               3,450    1,374    4,859      746     6,111    (5,303)
OTHER INCOME
 (EXPENSE)
   Interest expense    (422)    (658)    (782)    (900)   (1,546)   (1,778)
   Other income
    (expense)            53       47      311      231     2,351      (235)
                    ——-  ——-  ——-  ——-  ——–  ——–
INCOME (LOSS)
 BEFORE INCOME
 TAXES                3,081      763    4,388       77     6,916    (7,316)
PROVISION (BENEFIT)
 FOR INCOME TAXES     1,219      397    1,724      150    (2,522)   (1,299)
                    ——-  ——-  ——-  ——-  ——–  ——–
NET INCOME (LOSS)   $ 1,862  $   366  $ 2,664  $   (73) $  4,394  $ (6,017)
                    =======  =======  =======  =======  ========  ========
PER SHARE DATA
   Basic earnings
    (loss) per
    share           $  0.15  $  0.03  $  0.21  $ (0.01) $   0.35  $  (0.48)
                    =======  =======  =======  =======  ========  ========