33488--3/27/2009--ESCALADE

related topics

{condition, economic, financial}

{operation, international, foreign}

{stock, price, operating}

{stock, price, share}

{customer, product, revenue}

{acquisition, growth, future}

{operation, natural, condition}

{product, market, service}

{cost, operation, labor}

{product, liability, claim}

{system, service, information}

{cost, regulation, environmental}

{regulation, change, law}

{debt, indebtedness, cash}

{competitive, industry, competition}

{control, financial, internal}

{loan, real, estate}

{property, intellectual, protect}

{loss, insurance, financial}

{interest, director, officer}

{tax, income, asset}

{capital, credit, financial}

Sales declined in 2008 and could continue to decline in 2009. Sales to Escalade Sports largest customer declined significantly in 2008 and sales to this customer will continue to decline in 2009. Markets are highly competitive and the Company may not continue to compete successfully. If the Company is unable to predict or react to changes in consumer demand, it may lose customers and sales may decline. Business is seasonal and annual results are dependent on the success of second half sales. Quarterly operating results are subject to fluctuation. The Company is currently in default of certain financial covenants in its Credit Agreement with JPMorgan Chase Bank, N.A. and is in the process of restructuring the terms of the Credit Agreement. Operating results may be impacted by changes in the economy that impact business and consumer spending. If the national and global financial crisis intensifies, potential disruptions in the credit markets may adversely affect business, including the availability and cost of short-term funds for liquidity requirements and ability to meet long-term commitments, which could adversely affect results of operations, cash flows and financial condition. The current financial crisis in the United States and globally may have significant effects on customers and suppliers that would result in material adverse effects on business, operating results and stock price. Negative economic conditions could prevent us from accurately forecasting demand for our products which could adversely affect our operating results or market share. The Company may pursue strategic acquisitions, which could have an adverse impact on our business. Growth may strain resources, which could adversely affect business and financial performance. Ability to expand business will be dependent upon the availability of adequate capital. Failure to improve operational efficiency and reduce administrative costs could have a material adverse effect on liquidity, financial position and results of operations. Business may be adversely affected by the actions of and risks associated with third-party suppliers. Deterioration in relationships with suppliers or in the financial condition of suppliers could adversely affect liquidity, financial position and results of operations. Escalade may be subject to product liability claims and the Company s insurance may not be sufficient to cover damages related to those claims. Intellectual property rights are valuable, and any inability to protect them could reduce the value of products. The Company is subject to risks associated with laws and regulations related to health, safety and environmental protection. International operations expose the Company to the unique risks inherent in foreign operations. The Company could be adversely affected by changes in currency exchange rates and/or the value of the United States dollar. Failure to improve and maintain the quality of internal controls over financial reporting could materially and adversely affect the ability to provide timely and accurate financial information, which could harm the Company s reputation and share price. Failure to effectively implement the global integrated information system ( SURGE ) could cause incorrect information or delays in getting information which could adversely affect the performance of the Company. The preparation of financial statements requires the use of estimates that may vary from actual results. Changes in accounting standards could impact reported earnings and financial condition. Effective tax rate may fluctuate. The Company is currently not in compliance with NASDAQ requirements for continued listing of common stock. The Company is considering the potential for voluntary delisting of its common stock with NASDAQ if the Company remains eligible for suspending its SEC reporting obligations under the Securities Exchange Act of 1934, as amended. The market price of common stock is likely to be highly volatile as the stock market in general can be highly volatile. Information security may be compromised. Terrorist attacks or acts of war may seriously harm business. These risks are not exhaustive.

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33488--3/27/2009--ESCALADE_INC