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Letter to Shareholders

February 26, 2019

We continue to see the purchase habits of the sporting goods consumer transition from traditional brick and mortar to online retail. As this trend continues, we are making investments in our operational infrastructure, online marketing content, advertising and promotion, and increased sales support to meet the consumers’ requirements where they are choosing to shop and make purchases. Despite retail dynamics that caused the demise of additional retailers, Escalade Sports maintained momentum in the market.

Net income for the full year 2018 was $20.4 million, or $1.41 diluted earnings per share compared to a full year net income of $14.1 million, or $0.98 diluted earnings per share in 2017. We were impacted favorably with the selling of our equity position in Stiga Sports in Sweden which overcame the one-time benefit of the Tax Cuts and Job Act signed into law in 2017.

Our long-term strategy of growing the business through innovation and acquisitions led to our purchase of Victory Tailgate and supports our understanding of the needs and requirements of our consumers. We will continue to boldly invest in the categories and channels where there is opportunity. Our focus remains on continuing to improve our operational cost though consolidation and out sourcing as we aggressively execute and integrate on acquisitions that align with our business growth.

In closing, 2018 was a good year in a market that remains in a dynamic transformation. I am very proud of our team and their ability to anticipate and meet the challenges of the rapidly changing market by developing best-in-class products and customer service for our consumers, providing excellent support to our retail partners, and driving value for shareholders.

Signed

Dave Fetherman
President & CEO
Escalade, Inc.



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