Dear fellow shareholders:
Momentum continues to build at Escalade. Our balanced strategy of Product Innovation and Brand Marketing is
producing excellent results. Over the past year, we have delivered substantial improvement in sales and earnings.
For the twelve months ended July 9, 2011, the Company’s net income increased 38%, to $6.1 million on sales
growth of 11%. Our debt is now at appropriate levels and cash flows are much improved.
Based on our strong results, I’m pleased to announce that the Board of Directors has authorized the payment of
twenty-five cents ($0.25) per share dividend payable September 2, 2011, to all shareholders of record on August
25, 2011. Additionally, the Board of Directors has declared their intention to consider paying dividends on a
quarterly basis in the future. These future dividend payments will be determined and declared at the Board’s
discretion. We are confident that the strength of our cash flows supports our ability to make dividend payments
and to continue our investment in product innovation and brand marketing, which will enhance long-term sales
and earnings growth.
In addition to the dividend declaration, the Company has approved a plan to discontinue use of its Oracle ERP
system. A replacement system is expected to be in service by the end of fiscal year 2011. As a result of this
decision, the Company will shorten the economic life of this asset which will result in an acceleration of
depreciation expense of approximately $2.2 million ($1.4 million, net of tax) for each of the next two quarters.
This additional depreciation expense in 2011 of approximately $4.4 million ($2.8 million, net of tax) is a non-cash
adjustment, but will reduce 2011 EPS by approximately $0.22.
I want to personally thank you, our shareholders, for your support as we have reshaped Escalade into a market
innovator. I also want to thank our incredible associates in the Company. The momentum built by the Escalade
team over the past several years is a direct result of their commitment and passion for excellence. It’s an exciting
time at Escalade today with an even greater future ahead.
Robert J. Keller
President and Chief Executive Officer