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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended October 5, 2002
Commission File Number 0-6966
ESCALADE, INCORPORATED
----------------------
(Exact name of registrant as specified in its charter)
Indiana 13-2739290
--------- -----------
(State of incorporation) (I.R.S. EIN)
817 Maxwell Avenue, Evansville, Indiana 47717
---------------------------------------------
(Address of principal executive office)
812-467-1200
-------------
(Registrant's Telephone Number)
Securities registered pursuant to Section 12(b) of the Act
NONE
-----
Securities registered pursuant to section 12(g) of the Act
Common Stock, No Par Value
--------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
The number of shares of Registrant's common stock (no par value)
outstanding as of October 23, 2002 : 6,508,706
INDEX
Page No.
Part I. Financial Information:
Item 1 - Financial Statements:
Consolidated Condensed Balance Sheets (Unaudited)
October 5, 2002, October 6, 2001, and
December 29, 2001 3
Consolidated Condensed Statements of Income (Unaudited)
Three Months and Nine Months Ended
October 5, 2002 and October 6, 2001 4
Consolidated Condensed Statements of Comprehensive
Income (Unaudited)
Three Months and Nine Months Ended
October 5, 2002 and October 6, 2001 4
Consolidated Condensed Statements of Cash Flows (Unaudited)
Nine Months Ended October 5, 2002 and October 6, 2001 5
Notes to Consolidated Condensed Financial Statements 6 - 9
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 10 - 12
Item 3 - Quantitative and Qualitative Disclosures About
Market Risk 13
Item 4 - Controls and Procedures 13
Part II. Other Information 13
Item 6 - Exhibits and Reports on Form 8-K 13
Signatures 14
Certificate of Chief Executive Officer 15
Certificate of Chief Financial Officer 16
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(Dollars in Thousands) October 5 October 6, December 29,
2002 2001 2001
ASSETS -------------------------------------------
Current assets:
Cash and cash equivalents $ 475 $ 2,752 $ 920
Receivables, less allowances of
$629, $819 and $514 40,965 41,410 27,268
Inventories 30,682 27,520 17,293
Prepaid expense 885 199 164
Deferred income tax benefit 902 824 902
--------- --------- ---------
TOTAL CURRENT ASSETS 73,909 72,705 46,547
Property, plant, and equipment 34,584 33,091 33,985
Accum. depr. and amortization (25,808) (23,100) (23,779)
--------- --------- ---------
8,776 9,991 10,206
Goodwill 13,351 13,755 12,761
Other assets 14,331 6,025 6,597
--------- --------- ---------
$ 110,367 $ 102,476 $ 76,111
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable - bank $ 22,405 $ 24,640 $ 9,770
Current portion of long-term debt 1 267 167 167
Trade accounts payable 8,669 10,529 2,606
Accrued liabilities 15,418 16,404 18,748
Federal income tax payable 1,705 1,744 1,682
--------- --------- ---------
TOTAL CURRENT LIABILITIES 49,464 53,484 32,973
Other Liabilities:
Long-term debt 18,200 18,167 7,467
Deferred compensation 1,315 1,273 1,275
--------- --------- ---------
19,515 19,440 8,742
Stockholders' equity:
Preferred stock:
Authorized 1,000,000 shares;
no par value, none issued
Common stock:
Authorized 10,000,000 shares;
no par value, Issued and
outstanding - 6,508,706,
2,140,694, and 6,424,092 at
10-05-02, 10-06-01, and 12-29-01 6,509 2,141 6,424
Retained earnings 34,935 27,237 27,847
Accumulated other comprehensive
income (loss) (56) 174 125
--------- --------- ---------
41,388 29,552 34,396
--------- --------- ---------
$ 110,367 $ 102,476 $ 76,111
========= ========= =========
See notes to Consolidated Condensed Financial Statements.
ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(Dollars in Thousands, except per share amounts)
Three Months Ended Nine Months Ended
Oct. 5, Oct. 6, Oct. 5, Oct. 6,
2002 2001 2002 2001
----------------------------------------------------------------
Net sales $ 51,859 $ 54,423 $101,566 $100,678
Costs, expenses and other income:
Cost of products sold 36,686 39,732 70,599 71,241
Selling, administrative and
general expenses 8,015 7,318 19,632 17,024
Interest 303 374 670 1,097
Amortization of Goodwill -- 228 -- 758
Other (income) expense 371 286 220 503
-------- -------- -------- --------
45,375 47,938 91,121 90,623
-------- -------- -------- --------
INCOME BEFORE INCOME TAXES 6,484 6,485 10,445 10,055
Provision for income taxes 2,335 2,445 3,761 3,803
-------- -------- -------- --------
NET INCOME $ 4,149 $ 4,040 $ 6,684 $ 6,252
======== ======== ======== ========
Per share data:
Basic earnings per share $ .64 $ .63 $ 1.03 $ .97
Diluted earnings per share $ .63 $ .62 $ 1.02 $ .96
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
NET INCOME $ 4,149 $ 4,040 $ 6,684 $ 6,252
UNREALIZED GAIN (LOSS)
ON SECURITIES, NET OF TAX (103) (57) (181) (23)
-------- -------- -------- --------
COMPREHENSIVE INCOME $ 4,046 $ 3,983 $ 6,503 $ 6,229
======== ======== ======== ========
See notes to Consolidated Condensed Financial Statements.
ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in Thousands)
Nine Months Ended
Oct. 5, 2002 Oct. 6, 2001
Operating Activities: -------------------------------------
Net Income $ 6,684 $ 6,252
Depreciation and amortization 3,088 2,842
Adjustments necessary to reconcile
net income to net cash used by
operating activities (23,145) (13,194)
-------- --------
Net cash used by operating activities (13,373) (4,100)
-------- --------
Investing Activities:
Purchase of property and equipment (1,343) (2,019)
Equity investment in Schleicher & Co.
International AG (2,129) --
Purchase of certain assets of
Murrey and Sons (4,840) --
Purchase of certain assets of
Steve Mizerak, Inc. (2,489) --
Purchase of all assets relating to
The Step(R)product line (1,229) --
Purchase of certain assets of Accudart -- (1,966)
Purchase of certain assets of
U.S. Weight, Inc. -- (6,679)
-------- --------
Net cash used by investing activities (12,030) (10,664)
-------- --------
Financing Activities:
Net increase in notes payable - bank 12,635 11,373
Net increase in long-term debt 11,833 5,634
Proceeds from exercise of stock options 490 167
Purchase of common stock -- (805)
-------- --------
Net cash provided by financing activities 24,958 16,369
-------- --------
Increase (decrease)in cash and cash equivalents (445) 1,605
Cash and cash equivalents, beginning of period 920 1,147
-------- --------
Cash and cash equivalents, end of period $ 475 $ 2,752
======== ========
See notes to Consolidated Condensed Financial Statements.
ESCALADE, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
Note A - Basis of Presentation
- ------------------------------
The significant accounting policies followed by the Company and its
wholly owned subsidiaries for interim financial reporting are consistent with
the accounting policies followed for annual financial reporting. All adjustments
which are of a normal recurring nature and are in the opinion of management
necessary for a fair statement of the results for the periods reported have been
included in the accompanying consolidated condensed financial statements. The
condensed consolidated balance sheet of the Company as of December 29, 2001 has
been derived from the audited consolidated balance sheet of the Company as of
that date. Certain information and note disclosures normally included in the
Company's annual financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted. These condensed consolidated financial statements should
be read in conjunction with the consolidated financial statements and notes
thereto included in the Company's Form 10-K annual report for 2001 filed with
the Securities and Exchange Commission.
Note B - Seasonal Aspects
- -------------------------
The results of operations for the nine month periods ended October 5,
2002 and October 5, 2001 are not necessarily indicative of the results to be
expected for the full year.
Note C - Inventories (Dollars in Thousands)
- -------------------------------------------
10-5-02 10-6-01 12-29-01
------- ------- --------
Raw Materials $ 9,036 $ 6,427 $ 4,469
Work In Process 5,381 4,765 4,110
Finished Goods 16,265 16,328 8,714
------- ------- -------
$30,682 $27,520 $17,293
======= ======= =======
Note D - Income Taxes
- ---------------------
The provision for income taxes was computed based on financial
statement income.
ESCALADE, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
Note E - Earnings Per Share
- -----------------------------
Earnings per share (EPS) were computed as follows:
Three Months Ended
October 5, 2002
----------------------------------------------------
Weighted
Average Per Share
Income Shares Amount
------- --------- ----------
Net Income $ 4,149
---------
Basic Earnings per Share
Income available to common
stockholders 4,149 6,509 $ .64
=========
Effect of Dilutive Securities
Stock options 80
--------- ---------
Diluted Earnings Per Share
Income available to common
stockholders and assumed
conversions $ 4,149 6,589 $ .63
========= ========= =========
Three Months Ended
October 6, 2001
----------------------------------------------------
Weighted
Average Per Share
Income Shares Amount
------- --------- ----------
Net Income $ 4,040
---------
Basic Earnings per Share
Income available to common
stockholders 4,040 6,420 $ .63
=========
Effect of Dilutive Securities
Stock options 72
--------- ---------
Diluted Earnings Per Share
Income available to common
stockholders and assumed
conversions $ 4,040 6,492 $ .62
========= ========= =========
ESCALADE, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
Note E - Earnings Per Share
- ---------------------------------------
Earnings per share (EPS) were computed as follows:
Nine Months Ended
October 5, 2002
---------------------------------------------------
Weighted
Average Per Share
Income Shares Amount
--------- --------- ---------
Net Income $ 6,684
---------
Basic Earnings per Share
Income available to common
stockholders 6,684 6,479 $ 1.03
=========
Effect of Dilutive Securities
Stock options 80
--------- ---------
Diluted Earnings Per Share
Income available to common
stockholders and assumed
conversions $ 6,684 6,559 $ 1.02
========= ========= =========
Nine Months Ended
October 6, 2001
----------------------------------------------------
Weighted
Average Per Share
Income Shares Amount
------- --------- ----------
Net Income $ 6,252
---------
Basic Earnings per Share
Income available to common
stockholders 6,252 6,453 $ .97
=========
Effect of Dilutive Securities
Stock options 72
--------- ---------
Diluted Earnings Per Share
Income available to common
stockholders and assumed
conversions $ 6,252 6,525 $ .96
========= ========= =========
ESCALADE, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
Note F - Segment Information
- -----------------------------
As of and for the Nine Months Ended
October 5, 2002
----------------------------------------------------------
Office and
Sporting Graphic
Goods Arts Corporate Total
-------- ---------- --------- ---------
Revenues from external customers $ 78,615 $ 22,951 $ -- $101,566
Net income (loss) 4,470 2,591 (377) 6,684
Assets $ 80,133 $ 23,282 $ 6,952 $110,367
As of and for the Nine Months Ended
October 6, 2001
----------------------------------------------------------
Office and
Sporting Graphic
Goods Arts Corporate Total
-------- ---------- --------- ---------
Revenues from external customers $ 76,726 $ 23,952 $ -- $100,678
Net income 3,681 2,238 333 6,252
Assets $ 74,003 $ 21,648 $ 6,825 $102,476
ESCALADE, INCORPORATED AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THIRD QUARTER COMPARISON 2002 vs. 2001
Third quarter net sales were a little weaker than last year's third
quarter net sales decreasing $2,564,000 from $54,423,000 to $51,859,000 or 4.7%.
Earnings per share increased from 63(cent) per share to 64(cent) per share. The
quarter was affected by the West Coast Port closure. It is estimated that the
closure negatively impacted sporting goods net sales by about $5,000,000.
Escalade Sports continues to work on the integration of recent acquisitions into
its operations. Martin Yale continues its evaluation of a photo frame/desktop
accessories product line marketing opportunity. During the third quarter, Martin
Yale expensed $212,534 on this project. Martin Yale acquired approximately 22%
of the outstanding shares of Schleicher & Co. International AG during the
quarter, further strengthening Martin Yale's relationship with Schleicher as an
important distributor of Martin Yale products in the U.S., U.K. and France.
Schleicher, a German company founded in 1956 and listed on the Frankfort and
Stuttgart stock exchanges since 1989, manufactures a complete line of data
shredders. Martin Yale sold the remaining real estate and building in Los
Angeles during the quarter which resulted in a gain of $11,000. The total gain
on the sale of all the Los Angeles property was $434,000. Martin Yale's focus is
to return to continued growth through the development of new products and
increased distribution.
Escalade Sports had a decrease in net sales of $2,630,000 from
$47,304,000 to $44,674,000 or 5.6%. This decrease in net sales was mainly in the
game table category and was due to the West Coast Longshoreman lockout delaying
the release of containers shipped from China. While this lockout has been
discontinued, it is difficult to quantify what effect it might have on the
fourth quarter, if any. It all depends upon how quickly the containers are
released and then delivered to the customer.
Martin Yale had a slight increase in net sales of $66,000 from
$7,119,000 to $7,185,000 or .9%. Martin Yale has been experiencing a decline in
sales and income due to the sharp falloff of demand in office products related
to the poor economic environment, customer inventory reduction and customer
distribution center consolidation. There was some pickup in shipments towards
the end of the quarter.
Cost of sales as a percentage of net sales was 70.7% in the third
quarter of 2002 as compared to 73.0% last year. This decrease in cost of sales
percentage of net sales was due mainly to lower production costs for Martin
Yale's West Coast operations. Martin Yale transferred all of its West Coast
manufacturing to Mexico during the year 2001. The Mexico operations have lower
labor and overhead.
Selling, general and administrative expenses were 15.5% of net sales
in the third quarter of 2002 as compared to 13.5% of net sales last year. This
increase as a percentage of net sales was mainly due to higher sales promotion
and compensation expenses in both sporting goods and Martin Yale, the West Coast
Port closure and the additional expense related to the photo frame/desktop
accessories product line evaluation by Martin Yale.
Interest expense in 2002 was $303,000 as compared to $374,000 last
year, a decrease of $71,000 or 19.0%. This decrease was due to lower interest
rates.
NINE MONTHS COMPARISON 2002 VS. 2001
Net sales were up $888,000 from $100,678,000 to $101,566,000 in the
first nine months of 2002 as compared to last year, an increase of .9%. Net
income was up $432,000 from $6,252,000 to $6,684,000 or 6.9% and earnings per
share increased 6.2% from 97(cent) to $1.03.
ESCALADE, INCORPORATED AND SUBSIDIARIES
RESULTS OF OPERATIONS CONTINUED
Escalade Sports net sales were up $1,889,000 from $76,726,000 to
$78,615,000 or 2.5% over last year. Sales of fitness product from recent
acquisitions were up about $4,500,000 which was offset by a decrease in the game
table category of about $2,600,000 due to the West Coast Port closure.
Martin Yale net sales were down $1,001,000 from $23,952,000 to
$22,951,000 or 4.2% from last year. Martin Yale has been experiencing a decline
in sales and income due to the sharp falloff of demand in office products
related to the poor economic environment, customer inventory reduction and
customer distribution center consolidation. There was some pickup toward the end
of the quarter in shipments. It remains to be seen if these increases will
continue into the fourth quarter.
Cost of sales as a percentage of net sales was 69.5% in 2002 as
compared to 70.8% in 2001. This decrease in cost of sales percentage of net
sales was due mainly to reduced labor and overhead expenses at Martin Yale's
West Coast operations in Mexico.
Selling, general and administrative expenses as a percentage of net
sales were 19.3% as compared to 16.9% last year. The increase in these expenses
as a percentage of net sales was mainly due to increased compensation expenses,
higher sales promotion expenses, the West Coast Port closure and the additional
expense related to the photoframe/desktop accessories product line evaluation by
Martin Yale.
Interest expense was $670,000 in 2002 as compared to $1,097,000 last
year a decrease of $427,000 or 38.9%. This decrease was due to lower interest
rates.
LIQUIDITY AND CAPITAL RESOURCES
The Company's net cash used by operating activities was $13,373,000
during the first nine months of 2002. Inventories are up $13,389,000 and
accounts receivable are up $13,697,000 from the end of the year. Receivables are
up due to the third quarter sales and inventories are up due to acquisitions and
in preparation for fourth quarter shipments. The Company's net cash used by
investing activities was $12,030,000 during the first nine months of 2002. This
included $8,558,000 for acquisitions.
The Company's short term working capital requirements are funded by
cash flow and a revolving line of credit used to finance the purchase of trade
receivables by the Company's Swiss subsidiary from the Company's manufacturing
subsidiaries. The Company utilizes a Borrowing Base formula which defines and
identifies eligible accounts receivables in order to calculate the maximum
amount that could be borrowed under this revolving line of credit. At the end of
the third quarter, the maximum amount that could be drawn under this line of
credit was $30,000,000 of which $22,404,569 was used. This short term revolving
line of credit has been extended until July 15, 2003 with various levels of
credit available. The line of credit is $20,000,000 from June through August,
$30,000,000 from September through December, $20,000,000 in January, and
$10,000,000 from February through May.
The Company's long term financing requirements are currently funded by
a $25,000,000 revolving term loan which expires March 31, 2005. Under the terms
of the credit agreement the maximum borrowing available to the Company under
this revolving term loan is reduced by $5,000,000 on March 31 of each year until
the line expires. As of the end of the quarter, the maximum amount available was
$20,000,000 of which $16,100,000 was used. The Company uses this revolving term
loan from time to time to finance acquisitions, stock buy backs and other
material obligations that may arise. The Company believes that future long term
funding for acquisitions, stock buy backs or other material obligations deemed
appropriate by the Company's Board of Directors is available from similar credit
vehicles and/or other financial institutions.
During the third quarter the company made an investment in Schleicher
& Co. International AG by purchasing approximately 22% of its stock.
ESCALADE, INCORPORATED AND SUBSIDIARIES
RESULTS OF OPERATIONS CONTINUED
ACCOUNTING STANDARDS
In July 2001, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standard (SFAS) No. 141, Business
Combinations, which requires that the purchase method of accounting be used for
all business combinations completed after June 30, 2001. SFAS No. 141 specifies
that certain acquired intangible assets in a business combination be recognized
as assets separately from goodwill. Additionally, it requires the Company to
evaluate its existing intangible assets and goodwill and to make any necessary
reclassifications in order to conform with the new separation requirements at
the date of adoption. Goodwill and intangible assets determined to have
indefinite useful lives that are acquired in a business combination completed
after June 30, 2001 will not be amortized. Goodwill and intangible assets
acquired in business combinations completed before July 1, 2001 continue to be
amortized until December 29, 2001. With the exception of the immediate
requirement to use the purchase method of accounting for all future business
combinations completed after June 30, 2001, the Company was required to adopt
the provision of SFAS No. 141 on December 30, 2001, which it did.
In July 2001, the FASB issued SFAS No. 142, Goodwill and Other
Intangible Assets. SFAS No. 142 required that goodwill no longer be amortized
but instead be tested for impairment at least annually, and that intangible
assets other than goodwill should be amortized over their useful lives. The
Company was required to adopt the provisions on December 30, 2001. Upon
adoption, the Company was required to reassess the useful lives and residual
values of all intangible assets and make any necessary amortization period
adjustments by March 31, 2002. There were no such adjustments required or made
upon the adoption of SFAS No. 142.
The goodwill amortization in 2001 was $862,045 and under the new
Accounting Standards will be zero in 2002 and thereafter, unless there is
impairment. We will have additional amortization for intangibles in 2002
resulting from The Step(R) acquisition. The Step(R) patent/license is being
amortized over the remaining life of nine years. That will add about $535,000
additional amortization for intangibles in 2002 and yearly thereafter until
fully amortized.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements relating to present or
future trends or factors that are subject to risks and uncertainties. These
risks, include, but are not limited to, the impact of competitive products and
pricing, product demand and market acceptance, Escalade's ability to
successfully integrate the operations of acquired assets and businesses, new
product development, the continuation and development of key customer and
supplier relationships, Escalade's ability to control costs, general economic
conditions, fluctuations in operating results, changes in the securities markets
and other risks detailed from time to time in Escalade's filings with the
Securities and Exchange Commission. Escalade's future financial performance
could differ materially from the expectations of management contained herein.
Escalade undertakes no obligation to update these forward-looking statements
after the date of this report.
ESCALADE, INCORPORATED AND SUBSIDIARIES
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
None.
ITEM 4. CONTROLS AND PROCEDURES
The Company maintains disclosure controls and procedures that are
designed to ensure that information required to be disclosed in the Company's
Exchange Act reports is recorded, processed, summarized and reported within the
time periods specified in the SEC's rules and forms, and that such information
is accumulated and communicated to the Company's management, including its Chief
Executive Officer and Chief Financial Officer, as appropriate, to allow timely
decisions regarding required disclosure based closely on the definition of
"disclosure controls and procedures" in Rule 13a-14(c). In designing and
evaluating the disclosure controls and procedures, management recognized that
any controls and procedures, no matter how well designed and operated, can
provide only reasonable assurance of achieving the desired control objectives,
and management necessarily was required to apply its judgement in evaluating the
cost-benefit relationship of possible controls and procedures. Also, the Company
has investment in certain unconsolidated entities. As the Company does not
control or manage these entities, its disclosure controls and procedures with
respect to such entities are necessarily substantially more limited than those
it maintains with respect to its consolidated subsidiaries.
Within 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and with the participation of the
Company's management, including the Company's Chief Executive Officer and the
Company's Chief Financial Officer, of the effectiveness of the design and
operation of the Company's disclosure controls and procedures. Based on the
foregoing, the Company's Chief Executive Officer and Chief Financial Officer
concluded that the Company's disclosure controls and procedures were effective.
There have been no significant changes in the Company's internal
controls or in other factors that could significantly affect the internal
controls subsequent to the date the Company completed its evaluation. Therefore,
no corrective actions were taken.
PART II. OTHER INFORMATION
Item 1, 2, 3, 4, and 5. Not required.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Number Description
10.1 First Amendment to Amended and Restated Credit Agreement between
Escalade, Incorporated and Bank One, Indiana, National
Association. Effective date of the Amendment was August 29,
2002.
99.1 Chief Executive Officer Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
99.2 Chief Financial Officer Certification Pursuant to 18 U.S.C.
Section 1350, as Adopted Pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002.
(b) Reports on Form 8-K
None.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
ESCALADE, INCORPORATED
Date: October 25, 2002 /s/ C. W. (Bill) Reed
---------------- ---------------------
C. W. (Bill) Reed
President and
Chief Executive Officer
Date: October 25, 2002 /s/ John R. Wilson
---------------- ----------------------------
John R. Wilson
Vice President and
Chief Financial Officer
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, C. W. (Bill) Reed, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Escalade, Incorporated;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: October 25, 2002 /s/ C. W. (Bill) Reed
Chief Executive Officer
CERTIFICATION OF CHIEF FINANCIAL OFFICER
I, John R. Wilson, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Escalade, Incorporated;
2. Based on my knowledge, this quarterly report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
b) evaluated the effectiveness of the registrant's disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent function):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have
identified for the registrant's auditors any material weaknesses in
internal controls; and
b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal controls
subsequent to the date of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material weaknesses.
Date: October 25, 2002 /s/ John R. Wilson
Chief Financial Officer