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<SEC-DOCUMENT>0001019056-04-001275.txt : 20041026
<SEC-HEADER>0001019056-04-001275.hdr.sgml : 20041026
<ACCEPTANCE-DATETIME>20041026061751
ACCESSION NUMBER:		0001019056-04-001275
CONFORMED SUBMISSION TYPE:	10-Q
PUBLIC DOCUMENT COUNT:		8
CONFORMED PERIOD OF REPORT:	20041002
FILED AS OF DATE:		20041026
DATE AS OF CHANGE:		20041026

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ESCALADE INC
		CENTRAL INDEX KEY:			0000033488
		STANDARD INDUSTRIAL CLASSIFICATION:	 [3949]
		IRS NUMBER:				132739290
		STATE OF INCORPORATION:			IN
		FISCAL YEAR END:			1226

	FILING VALUES:
		FORM TYPE:		10-Q
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	000-06966
		FILM NUMBER:		041095321

	BUSINESS ADDRESS:	
		STREET 1:		817 MAXWELL AVE
		STREET 2:		P O BOX 899
		CITY:			EVANSVILLE
		STATE:			IN
		ZIP:			47717
		BUSINESS PHONE:		8124671200

	MAIL ADDRESS:	
		STREET 1:		PO BOX 889
		CITY:			EVANSVILLE
		STATE:			IN
		ZIP:			47706

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MARTIN YALE BUSINESS MACHINES CORP
		DATE OF NAME CHANGE:	19820310

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	MARTIN YALE INDUSTRIES INC
		DATE OF NAME CHANGE:	19720306

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	WILLIAMS MANUFACTURING CO
		DATE OF NAME CHANGE:	19710504
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-Q
<SEQUENCE>1
<FILENAME>escalade_q.txt
<DESCRIPTION>FORM 10-Q
<TEXT>
                       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 2, 2004
                          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)


                    251 Wedcor Avenue, Wabash, Indiana 46992
                    ----------------------------------------
                     (Address of principal executive office)

                                  260-569-7208
                         -------------------------------
                         (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 [ ]

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act

                                 Yes [X] No [ ]

The number of shares of Registrant's common stock (no par value) outstanding as
of October 20, 2004: 13,031,064
<PAGE>

                                      INDEX


                                                                            Page
                                                                             No.

Part I.    Financial Information:

Item 1 -   Financial Statements:

           Consolidated Condensed Balance Sheets (Unaudited) as
           of October 02, 2004, October 04, 2003, and December 27, 2003       3

           Consolidated Condensed Statements of Income (Unaudited)
           for the Three Months and Nine Months Ended October 02, 2004
           and October 04, 2003                                               4

           Consolidated Condensed Statements of Comprehensive
           Income (Unaudited) for the Three Months and Nine Months
           Ended October 02, 2004 and October 04, 2003                        4

           Consolidated Condensed Statements of Cash Flows (Unaudited)
           for the Nine Months Ended October 02, 2004 and October 04, 2003    5

           Notes to Consolidated Condensed Financial Statements               6

Item 2 -   Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                          9

Item 3 -   Quantitative and Qualitative Disclosures about Market Risk        12

Item 4 -   Controls and Procedures                                           13

Part II.   Other Information

Item 6 -   Exhibits and Reports on Form 8-K                                  13

           Signatures                                                        14

                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS (UNAUDITED)
(All amounts in thousands except share information)

<TABLE>
<CAPTION>
                                                  October 02,     October 04,    December 27,
                                                     2004            2003            2003
                                                 ------------    ------------    ------------
<S>                                              <C>             <C>             <C>
ASSETS
Current Assets:
   Cash and cash equivalents                     $        491    $        554    $        648
   Receivables, less allowance of
       $1,543; $1,313; and $1,991;
       respectively                                    59,003          64,183          45,073
   Inventories                                         43,011          42,477          29,853
   Prepaid expenses                                     1,215           1,592           1,611
   Deferred income tax benefit                          2,422           1,608           2,434
                                                 ------------    ------------    ------------
TOTAL CURRENT ASSETS                                  106,142         110,414          79,619

Property, plant and equipment                          51,524          46,954          48,844
   Accumulated depreciation and
       amortization                                   (35,605)        (29,376)        (31,307)
                                                 ------------    ------------    ------------
                                                       15,919          17,578          17,537

Intangible assets                                       7,965           8,936           9,026
Goodwill                                               17,399          17,946          18,777
Other assets                                            9,680           7,657           9,478
                                                 ------------    ------------    ------------
                                                 $    157,105    $    162,531    $    134,437
                                                 ============    ============    ============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Notes payable                                 $     27,837    $     28,939    $     21,568
   Current portion of long-term debt                      354             354             354
   Trade accounts payable                              18,202          22,730           8,139
   Accrued liabilities                                 24,812          22,347          23,321
   Income tax payable                                     367           2,677           1,580
                                                 ------------    ------------    ------------
TOTAL CURRENT LIABILITIES                              71,572          77,047          54,962

Other Liabilities:
   Long-term debt                                      16,960          29,766          15,729
   Interest rate swap agreement                           629             685           1,055
   Deferred compensation                                1,510           1,387           1,408
                                                 ------------    ------------    ------------
                                                       19,099          31,838          18,192

 Minority Interest                                         --             377              --

Stockholders' equity:
Preferred stock:
   Authorized 1,000,000 shares; no par
       value, none issued
Common stock:
   Authorized 30,000,000 shares; no
       par value, Issued and outstanding -
       13,031,064; 12,848,012; and 12,854,162;
       respectively                                    13,031          12,848          12,854
Retained Earnings                                      51,448          39,704          46,182
Accumulated other comprehensive income                  1,955             717           2,247
                                                 ------------    ------------    ------------
                                                       66,434          53,269          61,283
                                                 ------------    ------------    ------------
                                                 $    157,105    $    162,531    $    134,437
                                                 ============    ============    ============
</TABLE>

See notes to Consolidated Condensed Financial Statements.

                                       3
<PAGE>

ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (UNAUDITED)
(All amounts in thousands, except per share amounts)

<TABLE>
<CAPTION>
                                          ------------------------------------------------------------
                                               Three Months Ended              Nine Months Ended
                                          ----------------------------    ----------------------------
                                           October 02,     October 04,     October 02,     October 04,
                                              2004            2003            2004            2003
                                          ------------    ------------    ------------    ------------
<S>                                       <C>             <C>             <C>             <C>
  Net Sales                               $     78,492    $     73,660    $    168,397    $    152,600

  Costs, expenses and other income:
       Cost of products sold                    56,738          53,552         118,381         103,371
       Selling, general and
           administrative expenses              12,223          11,619          35,690          35,941
       Interest                                    489             700           1,427           1,800
       Other expense (income)                     (245)         (1,124)           (546)         (1,084)
       Restructuring costs                       1,412              --           1,412              --
       Goodwill impairment loss                  1,312              --           1,312              --
                                          ------------    ------------    ------------    ------------
                                                71,929          64,747         157,676         140,028

 Net income before income taxes and
        minority interest                        6,563           8,913          10,721          12,572

 Net Income in subsidiary allocated
         to minority interest                       --              (9)             --              (5)
 Provision for income taxes                      2,233           2,779           3,840           4,182
                                          ------------    ------------    ------------    ------------

 Net income                               $      4,330    $      6,125    $      6,881    $      8,385
                                          ============    ============    ============    ============

 Per Share Data:
       Basic earnings per share           $       0.33    $       0.48    $       0.53    $       0.65
       Diluted earnings per share         $       0.33    $       0.47    $       0.52    $       0.64




CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

 Net income                               $      4,330    $      6,125    $      6,881    $      8,385

 Unrealized gain on securities, net
       of tax                                       41               5              48              74

 Foreign currency translation
       adjustment                                   (1)            426            (617)          1,353

 Unrealized gain (loss) on interest
       rate swap agreement net
       of deferred tax expense of $155             161              43             276            (685)
                                          ------------    ------------    ------------    ------------

 Comprehensive income                     $      4,531    $      6,599    $      6,588    $      9,127
                                          ============    ============    ============    ============
</TABLE>

See notes to Consolidated Condensed Financial Statements.

                                       4
<PAGE>

ESCALADE, INCORPORATED AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
(All amounts in thousands)

<TABLE>
<CAPTION>
                                                               Nine Months Ended
                                                     ------------------------------------
                                                     October 02, 2004    October 04, 2003
                                                     ----------------    ----------------
<S>                                                  <C>                 <C>
 Operating Activities:
      Net income                                     $          6,881    $          8,385
      Depreciation and amortization                             4,832               3,996
      Gain on Debt Extinguishment                                  --                (699)
      Net income                                                1,312                  --
      Adjustments necessary to reconcile
         net income to net cash provided
         by operating activities                              (18,275)            (17,018)
                                                     ----------------    ----------------
      Net cash used by operating
         activities                                            (5,250)             (5,336)

Investing Activities:
      Purchase of property and equipment                       (1,397)             (1,827)
      Purchase of certain assets of
         North American Archery Group                              --             (11,432)
      Acquisition of majority interest
         in Schleicher & Co.
         International AG                                          --             (12,587)
      Equity investment in Sweden Table
         Tennis AB                                                 --                (187)
      Step(R) product license buyout                               --                (875)
                                                     ----------------    ----------------
      Net cash used by investing
         activities                                            (1,397)            (26,908)


  Financing Activities:

      Net increase in notes payable -
         Bank                                                   8,315              31,371
      Net decrease in long-term debt                             (167)               (167)
      Proceeds from exercise of stock
         options                                                1,103                 266
      Purchase of common stock                                   (984)             (1,999)
      Dividends Paid                                           (1,556)                 --
      Foreign Currency Translation                               (221)                (43)
                                                     ----------------    ----------------

      Net cash provided by financing
         activities                                              6490              29,428
                                                     ----------------    ----------------

  Net decrease in cash and cash
      equivalents                                                (157)             (2,816)
  Cash and cash equivalents, beginning
      of period                                                   648               3,370
                                                     ----------------    ----------------
  Cash and cash equivalents, end of
      period                                         $            491    $            554
                                                     ================    ================
</TABLE>

See notes to Consolidated Condensed Financial Statements.

                                       5
<PAGE>

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 that 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 27, 2003 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 2003 filed with
the Securities and Exchange Commission.


Note B - Seasonal Aspects
- --------------------------------------------------------------------------------

The results of operations for the nine-month periods ended October 02, 2004 and
October 04, 2003 are not necessarily indicative of the results to be expected
for the full year.


Note C - Stock Split
- --------------------------------------------------------------------------------

On May 28, 2004, the Company completed a two-for-one split on Escalade common
stock to all shareholders of record as of May 11, 2004. All earnings per share
data in these consolidated financial statements and notes to the consolidated
financial statements have been restated retroactively to reflect the stock
split. The stock split resulted in 6,518 thousand additional shares. The Company
has capitalized this transaction by recording a transfer from retained earnings
to common stock to allow common stock to remain at $1 per share.


Note D - Inventories
- --------------------------------------------------------------------------------

                                     October 02,    October 04,    December 27,
         (All amounts in thousands)      2004           2003           2003
         -----------------------------------------------------------------------

         Raw materials              $     10,853   $     10,909   $      7,300
         Work in progress                  7,010          5,662          5,133
         Finished goods                   25,148         25,906         17,420
                                    ------------   ------------   ------------
                                    $     43,011   $     42,477   $     29,853
                                    ============   ============   ============


Note E - Short-Term Debt
- --------------------------------------------------------------------------------

In September 2004, the Company executed a fourth amendment to the revolving term
loan agreement which added a Euro 2.5 million revolving term loan and an
overdraft facility of 1.0 million Euro and 0.5 million British Pounds. The
amendment did not alter the terms on the existing debt. The interest rate on the
Euro revolving term loan is tied to the Euribor rate and matures on July 15,
2006. The interest rate on the overdraft facilities is Libor plus 2%. At October
02, 2004, the Company had no borrowings under either instrument.

                                       6
<PAGE>

Note F - Notes Payable
- --------------------------------------------------------------------------------

On July 15, 2004 the Company's directly owned subsidiary, Indian-Martin, Inc.,
renewed its revolving line of credit under which it can borrow funds from time
to time to purchase eligible accounts receivable from the Company's operating
subsidiaries. The terms of the amended agreement remain essentially unchanged
with a new expiration date of July 15, 2006. Subject to limitations, the
aggregate borrowing under the revolving credit line is $45 million. At October
02, 2004, outstanding borrowings were $19.8 million utilizing the prime interest
rate option at an effective rate of 3.25%.


Note G - Restructuring Costs
- --------------------------------------------------------------------------------

On August 01, 2004, as a result of continued declines in office product sales
and increased competition, the Company initiated a facility consolidation plan
for North America and involuntary employee terminations throughout the office
product business in order to align the business with market conditions and
better position the business to compete against imports from Asia. Under this
plan the Company will close two facilities in North America and reduce its
workforce by 102 people. Accordingly, a restructuring charge of $1.4 million
($1.2 million, net of tax) has been recorded in the third quarter consisting of
$1.0 million related to involuntary severance and employee benefits; and $0.4
million associated with the write-down of fixed assets.


Note H - Goodwill Impairment Loss
- --------------------------------------------------------------------------------

One product line in the office product business segment is almost exclusively
manufactured in a facility slated to be closed as a result of the facility
consolidation plans initiated by the Company. Continued sales declines in this
product line and the planned closure of the associated manufacturing plant have
necessitated an impairment evaluation of the goodwill specifically allocated to
this product line. In accordance with the provisions of FASB Statement No. 142
Goodwill and Other Intangible Assets, the Company prepared a discounted cash
flow analysis which indicated that the book value of the product line
significantly exceeded its estimated fair value and that goodwill impairment had
occurred. Accordingly, the Company has recognized a non-cash impairment loss of
$1.3 million ($0.8 million, net of tax) in the third quarter.


Note I - Income Taxes
- --------------------------------------------------------------------------------

The provision for income taxes was computed based on financial statement income.


Note J - Dividend Payment
- --------------------------------------------------------------------------------

On March 12, 2004, the Company paid a dividend of $0.24 per common share to all
shareholders of record on March 5, 2004. The total amount of the dividend was
$1.6 million and was charged against retained earnings.

                                       7
<PAGE>

Note K - Segment Information
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                  As of and for the Nine Months
                                                      Ended October 02, 2004
                                  -----------------------------------------------------------
                                                    Office -
                                    Sporting        Graphic
         In thousands                 Goods           Arts           Corp.           Total
         ------------------------------------------------------------------------------------
<S>                               <C>            <C>             <C>             <C>
         Revenues from external
           customers              $    107,795   $     60,602    $         --    $    168,397
         Net Income (Loss)               7,434           (125)           (428)          6,881
         Total Assets             $     86,108   $     59,565    $     11,432    $    157,105


                                                  As of and for the Nine Months
                                                      Ended October 04, 2003
                                  -----------------------------------------------------------
                                                    Office -
                                    Sporting        Graphic
         In thousands                 Goods           Arts           Corp.           Total
         ------------------------------------------------------------------------------------

         Revenues from external
           customers              $     91,870   $     60,730    $         --    $    152,600
         Net Income (Loss)               5,930          2,663            (208)          8,385
         Total Assets             $     96,032   $     56,934    $      9,565    $    162,531
</TABLE>


Note L - Earnings Per Share
- --------------------------------------------------------------------------------

The shares used in computation of the Company's basic and diluted earnings per
common share are as follows:

                                                     Three Months Ended
                                                ---------------------------
                                                 October 02,    October 04,
         In thousands                               2004           2003
         ------------------------------------------------------------------
         Weighted average common shares
            outstanding                               13,041         12,854
         Dilutive effect of stock options                241            314
                                                ------------   ------------
         Weighted average common shares
            outstanding, assuming dilution            13,282         13,168
                                                ============   ============


                                                      Nine Months Ended
                                                ---------------------------
                                                 October 02,    October 04,
         In thousands                               2004           2003
         ------------------------------------------------------------------
         Weighted average common shares
            outstanding                               13,024         12,962
         Dilutive effect of stock options                195            314
                                                ------------   ------------
         Weighted average common shares
            outstanding, assuming dilution            13,219         13,276
                                                ============   ============

                                       8
<PAGE>

Note M - Employee Stock Option Plan
- --------------------------------------------------------------------------------

The Company has two stock-based compensation plans. The Company accounts for
these plans under the recognition and measurement principles of APB Opinion No.
25, Accounting for Stock issued to Employees, and related interpretations. The
following table illustrates the effect on net income and earnings per share if
the Company had applied the fair value provisions of FASB Statement No. 123,
Accounting for Stock-Based Compensation, to stock-based employee compensation.

<TABLE>
<CAPTION>
                                                          Three Months Ended
                                                      ---------------------------
                                                       October 02,    October 04,
         (In Thousands Except Per Share Amounts)          2004           2003
         ------------------------------------------------------------------------
<S>                                                   <C>            <C>
         Net income, as reported                      $      4,330   $      6,125
         Less:  Total stock-based employee
             compensation cost determined under the
             fair value based method, net of
             income taxes                                     (194)          (110)
                                                      ------------   ------------

         Pro forma net income                         $      4,136   $      6,015
                                                      ============   ============

         Earnings per share
             Basic--as reported                       $       0.33   $       0.48
                                                      ============   ============
             Basic--pro forma                         $       0.32   $       0.47
                                                      ============   ============

             Diluted--as reported                     $       0.33   $       0.47
                                                      ============   ============
             Diluted--pro forma                       $       0.31   $       0.46
                                                      ============   ============

                                                            Nine Months Ended
                                                      ---------------------------
                                                       October 02,    October 04,
         (In Thousands Except Per Share Amounts)          2004           2003
         ------------------------------------------------------------------------

         Net income, as reported                      $      6,881   $      8,385
         Less:  Total stock-based employee
             compensation cost determined under the
             fair value based method, net of
             income taxes                                     (583)          (330)
                                                      ------------   ------------

         Pro forma net income                         $      6,298   $      8,055
                                                      ============   ============

         Earnings per share
             Basic--as reported                       $       0.53   $       0.65
                                                      ============   ============
             Basic--pro forma                         $       0.48   $       0.62
                                                      ============   ============

             Diluted--as reported                     $       0.52   $       0.64
                                                      ============   ============
             Diluted--pro forma                       $       0.48   $       0.61
                                                      ============   ============
</TABLE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

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, new product development, the continuation
and development of key customer and supplier relationships, Escalade's ability
to control costs, general economic conditions, fluctuation in operating results,
changes in the securities market 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 release
revisions to these forward-looking statements after the date of this report.

                                       9
<PAGE>

Overview

Escalade, Incorporated ("Escalade" or "Company") manufactures and distributes
products for two industries: Sporting Goods and Office Products. Within these
industries the Company has successfully built a significant market presence in
niche markets. This strategy is heavily dependent on brand recognition and
excellent customer service. Management believes the key indicators in measuring
the success of this strategy are revenue and earnings growth. One of the
Company's key strategic advantages is the Company's established relationships
with major retailers which enable the Company to bring new products to the
market in a timely and cost effective manner. In addition to strategic customer
relations, the Company has over 75 years of manufacturing experience that enable
it to be a low cost supplier.

Results of Operations

Strong sales in the sporting goods segment during the third quarter resulted in
an increase in net sales of 6.6% compared to the same period last year. Building
on a strong first half, year-to-date net sales are 10.4% ahead of the same
period last year - all of the sales growth coming from the sporting goods
segment.

Due to non-recurring restructuring and goodwill impairment costs recorded in the
office products segment, net income for the third quarter was down 29.3%
compared to the prior year. The cumulative impact of these one-time charges was
$2.7 million, $2.1 million net of taxes. Since these are one-time charges not
reflective of continued operations, management believes that excluding these
charges affords a better comparison with past results. Excluding these
non-recurring charges, net income for the third quarter would have been $6.4
million - a 4.8% increase over the prior year. Net income for the nine months
was also negatively affected by these non-recurring charges reflecting a decline
of 17.9% over the same period last year. Excluding non-recurring charges,
year-to-date net income would be $9.0 million; an increase of 7.0% over the
prior year.

The following schedule sets forth certain consolidated statement of income data
as a percentage of net revenue for the periods indicated:

<TABLE>
<CAPTION>
                                                 Three Months             Nine Months
                                             ---------------------------------------------
                                               2004        2003        2004        2003
         ---------------------------------------------------------------------------------
<S>                                             <C>         <C>         <C>         <C>
         Net revenue                            100.0%      100.0%      100.0%      100.0%
         Cost of products sold                   72.3%       72.7%       70.3%       67.7%
                                             --------    --------    --------    --------
         Gross margin                            27.7%       27.3%       29.7%       32.3%
         Selling, administrative and
             general expenses                    15.6        15.8%       21.2        23.6%
                                             --------    --------    --------    --------
         Operating income - excluding non-
             recurring charges                   12.1        11.5         8.5         8.7
         Restructuring Costs                      1.8          --         0.8          --
                                             --------    --------    --------    --------
         Operating Income                        10.3%       11.5%        7.7%        8.7%
                                             ========    ========    ========    ========
</TABLE>

Consolidated Revenue and Gross Margin

Third quarter revenue growth of 13.3% in the sporting goods business was
partially offset by a 12.3% decline in the office products business.
Year-to-date, Sporting goods sales are ahead of the same period last year by
17.3% while office product sales are relatively unchanged.

Approximately 25% of the revenue growth in the sporting goods business is
attributed to inclusion for a full year of the archery business acquired in June
of last year. The remainder of the growth appears to come from earlier than
normal holiday season purchases by large retail customers. Overall revenue
growth in the sporting goods business for the year is anticipated to be modest
compared to the prior year.

The third quarter decline in office product revenues is primarily due to
shipping delays and lower shredder orders in North America. The Company believes
this decline is due to lost focus in the sales organization caused by
restructuring activities. Office product sales in North America declined $2.3
million or 20.3% in the third quarter compared to last year while European sales

                                       10
<PAGE>

during the same period remained unchanged. Total year-to-date revenues were
relatively unchanged from the same period last year although revenues in Europe
were up 12.9% and sales in North America declined 10.9%. Excluding the effect of
exchange rate fluctuations, European sales increased 3.6% year-to-date compared
to the prior year.

The consolidated gross margin rate for the third quarter increased from 27.3%
last year to 27.7% in the current year; primarily reflecting cost reduction
efforts and product price increases initiated in the office products business.
On a year-to-date basis, the gross margin rate declined from 32.3% last year to
29.7% in the current year primarily due to manufacturing inefficiencies
experienced earlier this year in the office product business and the adverse
effect of foreign currency on product manufactured in Germany and sold in North
America. The Company has initiated restructuring plans to increase manufacturing
efficiencies in Germany and implemented selling price increases to mitigate the
adverse foreign exchange effects. However, raw material costs in both business
segments continue to rise and may have future negative effects on the gross
margins in each business segment to the extent the Company cannot raise selling
prices and reduce costs. Year-to-date gross margin rates in the sporting goods
business are marginally higher than the same period last year as a result of the
archery business acquired in June of last year which has higher gross margin
rates than other sporting goods products. The year-to-date gross margin ratio in
the office product business is lower than last year, but expected to improve
through the remainder of this year as selling price increases become fully
implemented.

Consolidated Selling, General and Administrative Expenses

Consolidated selling, general and administrative costs ("SG&A") were slightly
higher in the third quarter compared to last year, but as a percentage of
revenues SG&A remained relatively unchanged from the same period last year. On a
year-to-date basis, total SG&A is relatively unchanged from the prior year, but
as a percent of revenues it decreased from 23.6% last year to 21.3% in the
current year. Efforts initiated this year to reduce SG&A in the office product
business are offset by increased SG&A costs incident to higher sales volume in
the sporting goods business.

Restructuring Costs

In July the Company formulated several restructuring activities to better align
the Company's office products business with current market conditions. In the
third quarter the Company recorded a restructuring charge of $1.4 million ($1.2
million net of taxes) to reflect involuntary employee reductions in Europe and
North America; and facility consolidations in North America. This restructuring
plan announced and initiated on August 01, 2004 includes involuntary workforce
reductions of approximately 100 employees. The restructuring charge includes
$1.0 million for employee severance and benefits; and $0.4 million related to
asset write-offs in conjunction with facility consolidations in North America.
Under the facility consolidation plan the Company will close its distribution
facility in North Carolina and its office product manufacturing facility in
Mexico. Management does not expect additional costs related to this
restructuring plan.

Goodwill Impairment Loss

The planned closure of the office product manufacturing plant in Mexico and the
continued sales decline of the product line manufactured from that location,
caused the Company to evaluate the goodwill specific to that plant and product
line. As a result of that evaluation the Company determined that a portion of
the goodwill had been permanently impaired and accordingly recorded an
impairment loss of $1.3 million ($0.8 million net of taxes) in the third
quarter. A portion of the product line manufactured in Mexico will be outsourced
to Asia and the remainder, mostly supplied by third parties, will be
consolidated with the Wabash, Indiana plant.

Financial Condition and Liquidity

The Company continues to enjoy strong financial health. The current ratio, a
basic measure of liquidity (current assets divided by current liabilities),
remains relatively unchanged from last year. Although the sales volume is higher
than last year, accounts receivable are down. Inventory levels are in line with
last year reflecting the seasonal buildup for the holiday sales season.

                                       11
<PAGE>

The following schedule summarizes the Company's total debt:

<TABLE>
<CAPTION>
                                           October 02,    October 04,    December 27,
         In thousands                         2004           2003           2003
         ---------------------------------------------------------------------------
<S>                                       <C>            <C>            <C>
         Notes payable short-term         $     27,837   $     28,939   $     21,568
         Current portion long-term debt            354            354            354
         Long term debt                         16,960         29,766         15,729
                                          ------------   ------------   ------------
         Total debt                       $     45,151   $     59,059   $     37,651
                                          ============   ============   ============
</TABLE>

Total debt at October 02, 2004 was $13.9 million lower than the balance at
October 04, 2003. The decrease from last year represents the absence of any
significant acquisitions and the strong cash flows inherent in the business. As
a percentage of stockholders' equity, total debt has decreased from 111% at
October 04, 2003, to 68% at October 02, 2004.

During the nine months ended October 02, 2004, operations used $5.2 million in
cash, relatively unchanged from the same period last year. The absence of any
significant acquisition in the current year resulted in a significant reduction
in bank debt borrowings; $8.3 million in the current year compared to $31.2
million last year.

The Company's working capital requirements are primarily funded from operating
cash flows and revolving credit agreements with its banks. The Company's
relationship with its primary lending bank remains strong and the Company
expects to have access to the same level of revolving credit that was available
in 2003. In addition, the Company believes it can quickly reach agreement to
increase available credit should the need arise.


ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is exposed to financial market risks, including changes in currency
exchange rates, interest rates and marketable equity security prices. To
mitigate these risks, the Company utilizes derivative financial instruments,
among other strategies. At the present time, the only derivative financial
instrument used by the Company is an interest rate swap. The Company does not
use derivative financial instruments for speculative purposes.

A substantial majority of revenue, expense and capital purchasing activities are
transacted in U.S. dollars. However, the Company's foreign subsidiaries enter
into transactions in other currencies, primarily the Euro. To protect against
reductions in value and the volatility of future cash flows caused by changes in
currency exchange rates, the Company carefully considers the use of transaction
and balance sheet hedging programs. Such programs reduce, but do not entirely
eliminate, the impact of currency exchange rate changes. Presently the Company
does not employ currency exchange hedging financial instruments, but has
adjusted transaction and cash flows to mitigate adverse currency fluctuations.
Historical trends in currency exchanges indicate that it is reasonably possible
that adverse changes in exchange rates of 20% for the Euro could be experienced
in the near term. Such adverse changes would not have resulted in a material
impact on income before taxes for the nine months ended October 02, 2004.

A substantial portion of the Company's debt is based on U.S. prime and LIBOR
interest rates. In an effort to lock-in current low rates and mitigate the risk
of unfavorable interest rate fluctuations the Company entered an interest rate
swap agreement that effectively converted a portion of its variable rate debt
into fixed rate debt.

An adverse movement of equity market prices would have an impact on the
Company's long-term marketable equity securities that are included in other
assets on the consolidated balance sheet. At October 02, 2004 the aggregate book
value of long-term marketable equity securities was $1.5 million. Due to the
unpredictable nature of the equity market the Company has not employed any hedge
programs relative to these investments.

                                       12
<PAGE>

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 judgment 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.

The Company has 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 as of the end of the period covered by this report. 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.   Not Required.

Item 2.

   (c)   Issuer Purchases of Equity Securities

                                                  (c) Total      (d) Maximum
                                                  Number of       Number (or
                                                  Shares (or      Approximate
                                                    Units)        Dollar Value)
                                                  Purchased      of Shares (or
                      (a) Total                   as Part of      Units) that
                      Number of     (b) Average    Publicly       May Yet Be
                        Shares       Price Paid   Announced        Purchased
                      (or Units)     per Share     Plans or     Under the Plans
Period                Purchased      (or Unit)     Programs       or Programs
- --------------------  ----------     ----------  ------------  --------------
07/11/2004 through
08/07/2004                None          None           None           None
- --------------------  ----------     ----------  ------------  --------------
08/08/2004 through
09/04/2004                14,450(1)  $   11.423       286,610  $      835,808
- --------------------  ----------     ----------  ------------  --------------
09/05/2004 through
10/02/2004                None           None          None           None
- --------------------  ----------     ----------  ------------  --------------
Total                     14,450     $   11.423       286,610  $      835,808
- --------------------  ----------     ----------  ------------  --------------

(1)  The Company announced in February 2003 that the Board of Directors had
     approved a share repurchase plan. Under the plan the Company is authorized
     to expend up to $3,000,000 to repurchase shares on the open market as well
     as in private negotiated transactions. The repurchase plan has no
     expiration date.

Item 3, 4, 5.  Not Required.
                                       13
<PAGE>

Item 6.  Exhibits and Reports on Form 8-K

   (a)      Exhibits

        Number    Description

         10.1     Fourth amendment to amended and restated credit agreement
                  dated June 1, 2003 by and between Escalade, Incorporated and
                  Bank One, N.A. a national banking association. The Effective
                  date of amendment was July 15, 2004.

         10.2     Euro revolving note dated July 15, 2004, in principal amount
                  of (euro)2,500,000, executed by Escalade, Incorporated in
                  favor of Bank One, N.A., London branch.

         10.3     Uncommitted overdraft facility not to exceed 1.0 million Euro
                  and 500 thousand pounds sterling between Escalade,
                  Incorporated and Bank One, N.A., London branch.

         31.1     Chief Executive Officer Rule 13a-14(a)/15d-14(a)
                  Certification.

         31.2     Chief Financial Officer Rule 13a-14(a)/15d-14(a)
                  Certification.

         32.1     Chief Executive Officer Section 1350 Certification.

         32.2     Chief Financial Officer Section 1350 Certification.


   (b)      Reports on Form 8-K

         1.       On July 30, 2004, Escalade filed a report on Form 8-K relating
                  to its financial information for the quarter ended July 10,
                  2004 and forward-looking statements as presented in the
                  shareholder message and press release dated July 30, 2004.


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 22, 2004                 /s/ C. W. (BILL) REED
        ----------------                 -------------------------------------
                                         C. W. (Bill) Reed
                                         President and Chief Executive Officer



Date:   October 22, 2004                 /s/ TERRY D. FRANDSEN
        ----------------                 -------------------------------------
                                         Terry D. Frandsen
                                         Vice President and
                                         Chief Financial Officer

                                       14

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>2
<FILENAME>ex10_1.txt
<DESCRIPTION>EXHIBIT 10.1
<TEXT>
                                  Exhibit 10.1
                                  ------------

                         FOURTH AMENDMENT TO AMENDED AND
                            RESTATED CREDIT AGREEMENT

         ESCALADE, INCORPORATED, an Indiana corporation (the "Company"), and
BANK ONE, N.A.., a national banking association (the "Bank"), agree as follows:

1.       CONTEXT.    This agreement is made in the context of the following
agreed state of facts:

               a.    The Company and the Bank (then Bank One, Indiana, N.A.) are
               parties to an Amended and Restated Credit Agreement effective
               October 24, 2001 as modified by a First Amendment to Amended and
               Restated Credit Agreement dated August 29, 2002, as further
               modified by a Second Amendment to Amended and Restated Credit
               Agreement dated April 17, 2003, and as further modified by a
               Third Amendment to Amended and Restated Credit Agreement dated
               June 1, 2003 (the "Agreement").

               b.    The Company and the Bank desire to amend the Agreement.

               c.    The Company and Bank have executed this document (this
               "Fourth Amendment") to give effect to their agreement.

2.       AMENDMENT.

         (a)   The pricing matrix appearing in the definition of Applicable
Spread in Section 1 of the Agreement is hereby amended and replaced with the
following:

<TABLE>
<CAPTION>
                                                                      Unused       Applicable      Applicable
     Level          Leverage Ratio          LIBOR        Prime         Fee         Commission       Issuance         Euribor
                                                                                      Rate          Fee Rate
<S>                <C>                      <C>          <C>           <C>           <C>             <C>              <C>

      V                >2.50:1.00          +200bps        +0bps      +37.5bps       +137.5 bps      +62.5 bps       + 200 bps


      IV           2.00 to 2.49:1.00       +175bps      -37.5bps      +25bps        +125 bps        +50 bps         + 175 bps


      III          1.50 to 1.99:1.00       +150bps       -75bps       +25bps        +112.5 bps      +37.5 bps       + 150 bps


      II           1.00 to 1.49:1.00       +125bps       -75bps       +25bps        +100 bps        +25 bps         + 125 bps


      I                <1.00:1.00          +100bps       -75bps       +25bps        +87.5 bps       +12.5 bps       + 100 bps
</TABLE>

         (b)   The following definitions contained in the Agreement are hereby
amended and restated as follows:

                                       15
<PAGE>

                  o        "Bank" means, collectively, the Bank and the London
                  Bank, with the exception of Sections 2.a and 2.b of the
                  Agreement, in which Sections Bank shall refer only to Bank
                  One, N.A., a national banking association.

                  o        "Loan" means, collectively, the Revolving Loan, the
                  Euro Revolving Loan and the Uncommitted Overdraft Facility.

         (c)   The following definitions are hereby added to the Agreement:

                  o        EMU Legislation" means legislative measures of the
                  Council of the European Union for the introduction of,
                  changeover to, or operation of, a single or unified European
                  currency being part of the implementation of the Third Stage
                  of Economic and Monetary Union as contemplated by the Treaty
                  on European Union.

                  o        "Euribor" means in relation to each Interest Period
                  in the case of Advances denominated in Euros, the rate which
                  is determined by the Banking Federation of the European Union
                  for that Interest Period or, if there is no such applicable
                  rate so determined, the arithmetic mean, rounded upward, if
                  necessary, to the nearest one-sixteenth of one per cent
                  (1/16%), of the rates quoted by the London Bank to leading
                  banks in the European Interbank Market at 11.00 am (Brussels
                  time) on the Quotation Date for (in both cases) the offering
                  of deposits in Euros for a period comparable to the Interest
                  Period of the relevant Loan denominated in Euros.

                  o        "Euro" means the single lawful currency for the
                  time being of the Participating Member States.

                  o        "Euro Revolving Loan" is used as defined in Section
                  2.c(i).

                  o        "Euro Revolving Loan Maturity Date" means initially
                  July 15, 2006, and hereafter any subsequent date to which the
                  Commitment may be extended by the Bank.

                  o        "Euro Revolving Note" is used as defined in Section
                  2.c(ii).

                  o        "European Interbank Market" means the interbank
                  market for Euros operating in the Participating Member States.

                  o        "Uncommitted Overdraft Facility" means the working
                  capital facility granted to the Company by the London Bank as
                  described in the Overdraft Addendum.

                  o        "Interest Period" means each consecutive 30, 90 or
                  180 day period effective as of the first day of each Interest
                  Period and ending on the last day of each Interest Period,
                  provided that if any interest Period is scheduled to end on a
                  date for which there is no numerical equivalent to the date on
                  which the Interest Period commenced, then it shall end instead
                  of the last day of such calendar month.

                  o        "London Bank" means Bank One, N.A., acting through
                  its London branch and shall include its successors,
                  transferees and assigns.

                  o        "Overdraft Addendum" means the Addendum to Fourth
                  Amendment to Amended and Restated Credit and Security
                  Agreement (Uncommitted Overdraft Facility) attached hereto and
                  incorporated herein by reference.

                                       16
<PAGE>

                  o        "Participating Member State" means each state so
                  described in any EMU Legislation.

                  o        "Quotation Date" means, in relation to any Interest
                  Period, or any other period for which an interest rate is to
                  be determined under any provision of this agreement, the day
                  on which quotations would ordinarily be given by leading banks
                  in the European Interbank Market for deposits in Euros, for
                  delivery on the first day of that Interest Period or other
                  period, or if quotations would ordinarily be given on more
                  than one day, the last of such days.

                  o        "Sterling" means the lawful currency, for the time
                  being, of the United Kingdom.

                  o        "Treaty on European Union" means the Treaty of Rome
                  of 25 March 1957, as amended by the Single European Act 1986
                  and the Maastricht Treaty of 7 February 1992.

         (d)   A new Section 2.c is hereby added to the Agreement as follows:

                  c.       The Revolving Loan. The London Bank will make a
               revolving loan to the Company on the following terms and subject
               to the following conditions:

                           (i)      The Commitment -- Use of Proceeds. From
                           this date and until the Euro Revolving Loan Maturity
                           Date, the London Bank agrees to make Advances
                           (collectively, the "Euro Revolving Loan") under a
                           revolving line of credit from time to time to the
                           Company of amounts not exceeding in the aggregate at
                           any time outstanding Two Million Five Hundred
                           Thousand Euros ((euro)2,500,000.00) (the "Euro
                           Revolving Loan Commitment"), as decreased from time
                           to time as hereinafter set forth, provided that all
                           of the conditions of lending stated in Section 7 of
                           this Agreement have been fulfilled at the time of
                           each Advance. Proceeds of the Euro Revolving Loan
                           shall be used to accommodate overseas operations, and
                           hereafter may be used by the Company only to fund
                           working capital requirements. The initial Commitment
                           shall be available to the Company until July 15,
                           2006.

                           (ii)     Method of Borrowing. The obligation of
                           the Company to repay the Euro Revolving Loan shall be
                           evidenced by a promissory note (the "Euro Revolving
                           Note") of the Company in the form of Exhibit "E". So
                           long as no Event of Default or Unmatured Event of
                           Default shall have occurred and be continuing and
                           until the Euro Revolving Loan Maturity Date, the
                           Company may borrow, repay and reborrow (subject to
                           Section 2.a.(i) above) under the Euro Revolving Note
                           on any Banking Day, provided that no borrowing may
                           cause the principal balance of the Euro Revolving
                           Loan to exceed the Euro Revolving Loan Commitment or
                           may result in an Event of Default or an Unmatured
                           Event of Default. Each Advance under the Euro
                           Revolving Loan shall be conditioned upon receipt by
                           the London Bank from the Company of an Application
                           for Euro Revolving Loan Advance and an Officer's
                           Certificate, provided that the London Bank may, at
                           its discretion, make a disbursement upon the oral
                           request of the Company made by an Authorized Officer,
                           or upon a request transmitted to the London Bank by
                           telephone facsimile ("fax") machine, or by any other
                           form of written electronic communication (all such
                           requests for Advances being hereafter referred to as
                           "informal requests"). In so doing, the London Bank
                           may rely on any informal request which shall have

                                       17
<PAGE>

                           been received by it in good faith from a person
                           reasonably believed to be an Authorized Officer. Each
                           informal request shall be promptly confirmed by a
                           duly executed Application and Officer's Certificate
                           if the London Bank so requires and shall in and of
                           itself constitute the representation of the Company
                           that no Event of Default or Unmatured Event of
                           Default has occurred and is continuing or would
                           result from the making of the requested Advance and
                           that the making of the requested Advance shall not
                           cause the principal balance of the Euro Revolving
                           Loan to exceed the current Euro Revolving Loan
                           Commitment. All borrowings and reborrowings and all
                           repayments shall be in amounts of not less than Two
                           Hundred Fifty Thousand Euros ((euro)250,000), except
                           for repayment of the entire principal balance of the
                           Euro Revolving Loan and except for special
                           prepayments of principal required under the terms of
                           Section 2.c.(i). Upon receipt of an Application, or
                           at the London Bank's discretion upon receipt of an
                           informal request for an Advance and upon compliance
                           with any other conditions of lending stated in
                           Section 7 of this Agreement applicable to the Euro
                           Revolving Loan, the London Bank shall disburse the
                           amount of the requested Advance to the Company. All
                           Advances by the London Bank and payments by the
                           Company shall be recorded by the London Bank on its
                           books and records, and the principal amount
                           outstanding from time to time, plus interest payable
                           thereon, shall be determined by reference to the
                           books and records of the London Bank. The London
                           Bank's books and records shall be presumed prima
                           facie to be correct as to such matters.

                           (iii)    Interest on the Euro Revolving Loan.
                           The principal amount of the Euro Revolving Loan
                           outstanding from time to time shall bear interest
                           until the Euro Revolving Loan Maturity Date at a rate
                           per annum equal to the Euribor-based Rate for a
                           period ("Interest Period") of 30, 90 or 180 days;
                           provided that an election of a Euribor-based Rate for
                           an Interest Period extending beyond the Euro
                           Revolving Loan Maturity Date shall be permitted only
                           at the discretion of the Bank. After maturity,
                           whether on the Euro Revolving Loan Maturity Date or
                           on account of acceleration of maturity upon the
                           occurrence of an Event of Default, and until paid in
                           full, the Euro Revolving Loan shall bear interest at
                           a rate equal to the Euribor-based Rate then in effect
                           plus three percent (3%). Accrued interest shall be
                           due and payable monthly on the last Banking Day of
                           each month prior to maturity. After maturity,
                           interest shall be payable as accrued and without
                           demand.

                           (iv)     Unused Fee. In addition to interest on
                           the Euro Revolving Loan, the Company shall pay to the
                           London Bank a fee (the "Unused Fee") for each partial
                           or full calendar quarter during which the Euro
                           Revolving Loan Commitment is outstanding equal to the
                           Applicable Unused Fee Rate per annum of the amount of
                           the average daily excess of the Euro Revolving Loan
                           Commitment over the average daily principal balance
                           outstanding under the Euro Revolving Loan. Unused
                           fees for each calendar quarter shall be due and
                           payable within ten (10) days following the London
                           Bank's submission of a statement of the amount due.
                           Such fees may be debited by the London Bank when due
                           to any demand deposit account of the Company carried
                           with the London Bank without further authority.

                           (v)      Procedures for Electing Euribor-based
                           Rates--Certain Effects of Election. Euribor based
                           Rates may be elected only in accordance with the
                           following procedures, shall be subject to the
                           following conditions and the election of an

                                       18
<PAGE>

                           Euribor-based Rate shall have the following
                           consequences in addition to other consequences stated
                           in this Agreement:

                                    A.       The Euribor-based Rate may be
                           elected only for Euro Revolving Loans or portions of
                           Euro Revolving Loans in a minimum amount of Two
                           Hundred Fifty Thousand Euros ((euro)250,000).

                                    B.       No Euribor-based Rate may be
                           elected at any time that an Event of Default or
                           Unmatured Event of Default has occurred and is
                           continuing.

                                    C.       Voluntary prepayment prior to
                           scheduled maturity of all or any portion of a Euro
                           Revolving Loan on which interest is accruing at a
                           Euribor-based Rate shall be subject to
                           contemporaneous payment of the Prepayment Premium if,
                           at the time of prepayment, the Reinvestment Rate is
                           less than the Euribor-based Rate at which interest
                           accrues on the Euro Revolving Loan. A Prepayment
                           Premium shall also be due and payable on prepayment
                           of all or any portion of the Euro Revolving Loan
                           prior to scheduled maturity because of acceleration
                           of maturity on account of an Event of Default if, at
                           the time of acceleration of maturity, the
                           Reinvestment Rate is less than the Euribor-based Rate
                           at which interest is accruing on the Euro Revolving
                           Loan. If at the time of any voluntary or mandatory
                           prepayment of any portion of the principal of any
                           Euro Revolving Loan, interest accrues on the Euro
                           Revolving Loan at more than one Euribor-based Rate,
                           such prepayment shall be applied first to that
                           portion or those portions on which interest accrues
                           at a Rate or Rates which results in no Prepayment
                           Premium or the lowest Prepayment Premium or Premiums.

                                    D.       On any Quotation Date, the
                           Company may request a quotation of the Euribor-based
                           Rate then in effect from the London Bank for an
                           amount and an Interest Period as the Company may
                           determine. As soon as possible, and in any event
                           before the close of business on the next following
                           Banking Day, the London Bank shall quote such
                           Euribor-based Rate. The Company shall then have until
                           the end of the Quotation Day on which such quotation
                           is given or within such shorter time as the London
                           Bank may specify, to exercise its option to elect a
                           Euribor-based Rate quoted, subject to all other
                           conditions and limitations stated in this Agreement.
                           The period for which any Euribor-based Rate is
                           effective shall begin on the second Banking Day
                           following the day on which the quotation is given.

                                    E.       An election of a Euribor-based
                           Rate may be communicated to the London Bank on behalf
                           of the Company only by an Authorized Officer. Such
                           election may be communicated by telephone, or by
                           telephone facsimile (fax) machine or any other form
                           of written electronic communication, or by a writing
                           delivered to the London Bank. At the request of the
                           London Bank, the Company shall confirm any election
                           in writing and such written confirmation shall be
                           signed by an Authorized Officer. The London Bank
                           shall be entitled to rely on any oral or written
                           electronic communication of an election of a
                           Euribor-based Rate which is received by an
                           appropriate London Bank employee from anyone
                           reasonably believed in good faith by such employee to
                           be an Authorized Officer.

                                    F.       The London Bank may elect not to
                           quote a Euribor-based Rate on any day on which the
                           Bank has determined that it is not practical to quote
                           such rate because of the unavailability of sufficient
                           funds to the London Bank for appropriate terms at

                                       19
<PAGE>

                           rates approximating the relevant Euribor Rate, or
                           because of legal or regulatory changes which make it
                           impractical or burdensome for the London Bank to lend
                           money at a Euribor-based Rate.

                                    G.       If, as a result of any
                           regulatory change, the basis of taxation of payments
                           to the London Bank of the principal of or any
                           interest on any Euro Revolving Loan bearing interest
                           at a Euribor-based Rate or any other amounts payable
                           hereunder in respect thereof, other than taxes
                           imposed on the overall net income of the London Bank,
                           is changed, or any reserve, special deposit, or
                           similar requirement relating to any extensions of
                           credit or other assets of or any deposits with or
                           other liabilities of the London Bank are imposed,
                           modified, or deemed applicable, and the London Bank
                           reasonably determines that, by reason thereof, the
                           cost to it of making, issuing, or maintaining any
                           Euro Revolving Loan at a Euribor-based Rate is
                           increased by an amount deemed by it to be material,
                           then the Company shall pay promptly upon demand to
                           the London Bank such additional amounts as the London
                           Bank reasonably determines will compensate for such
                           increased costs; provided, however, that the Company
                           shall not be the only borrower of the London Bank
                           that is singled out from a group of similarly
                           situated borrowers of the London Bank subject to this
                           type of provision that is requested to remit
                           increased costs. Any determination by the London Bank
                           of increased costs of maintaining deposits made
                           pursuant to the provisions of this section shall be
                           final, absent manifest error.

                           (vi)     Calculation of Interest. Interest on
                           the Euro Revolving Loan shall be computed by applying
                           the ratio of the annual interest rate over a year of
                           360 days, multiplied by the outstanding principal
                           balance, multiplied by the actual number of days the
                           principal balance is outstanding.

                           (vii)    Manner of Payment - Application.
                           Unless otherwise agreed to, in writing, or otherwise
                           required by applicable law, payments will be applied
                           first to accrued, unpaid interest, then to principal,
                           and any remaining amount to any unpaid collection
                           costs, late charges and other charges, provided,
                           however, upon delinquency or other default, the
                           London Bank reserves the right to apply payments
                           among principal, interest, late charges, collection
                           costs and other charges at its discretion. All
                           prepayments shall be applied to the indebtedness
                           owing hereunder in such order and manner as the
                           London Bank may from time to time determine in its
                           sole discretion.

                           (viii)   Late Payment. If any payment required
                           under the Euro Revolving Loan is not paid within ten
                           (10) days after such payment is due, then, at the
                           option of London Bank, Company shall pay a late
                           charge equal to five percent (5.0%) of the amount of
                           such payment or (euro)______, whichever is greater,
                           up to the maximum amount of (euro)_______ per late
                           charge to compensate London Bank for administrative
                           expenses and other costs of delinquent payments. This
                           late charge may be assessed without notice, shall be
                           immediately due and payable and shall be in addition
                           to all other rights and remedies available to London
                           Bank.

                           (ix)     Default Rate of Interest. Upon the
                           occurrence of an Event of Default and during the
                           continuation thereof, and after maturity, including
                           maturity upon acceleration, London Bank, at its
                           option, may, if permitted under applicable law, do
                           one or both of the following: (i) increase the
                           interest rate under the Euro Revolving Loan to the
                           rate that is three percent (3%) above the rate that

                                       20
<PAGE>

                           would otherwise be payable thereunder, and (ii) add
                           any unpaid accrued interest to principal and such sum
                           will bear interest therefrom until paid at the rate
                           provided herein or under the Notes (including any
                           increased rate). The interest rate under the Euro
                           Revolving Loan will not exceed the maximum rate
                           permitted by applicable law under any circumstances.

         (e)   Section 4 of the Agreement is hereby amended by adding the
following sentence:

                     "In the event the proceeds of any advance under the Euro
               Revolving Loan or the Uncommitted Overdraft Facility are directed
               to a Subsidiary, Company shall remain primarily liable to the
               Bank for such Advance and shall execute a Guaranty in favor of
               Bank.

         (f)   A new Section 19 is hereby added to the Agreement as follows:

                     19. Cross-Default/Cross-Collateralization. All loans and
         advances by Bank and London Bank to Company under this Agreement, the
         other loan documents executed in connection herewith, and under all
         other agreements constitute one loan, and all indebtedness and
         obligations of Company to Bank and London Bank under this and under all
         other agreements, present and future, constitute one general obligation
         secured by the collateral and security held and to be held by Bank and
         London Bank hereunder and by virtue of all other assignments and
         security agreements between Bank and Company or London Bank and Company
         now and hereafter existing. It is expressly understood and agreed that
         all of the rights of Bank and London Bank contained in this Agreement
         shall likewise apply insofar as applicable to any modification of or
         supplement to this Agreement and to any other agreements, present and
         future, between Bank and Company and London Bank and Company.

         (g)   A new Section 20 is hereby added to the Agreement as follows:

                     20. Assignment. The Company may not assign or otherwise
         transfer the benefits or burden of the Loans. The Bank may at its
         discretion assign and/or transfer all or part of its rights and/or
         obligations under the Loans. The Bank may disclose to any actual or
         proposed assignee, transferee or other person with whom it may enter
         into contractual relations in connection herewith any such information
         about the Company as the Bank may consider appropriate.

                     Without prejudice to the generality of the foregoing, the
         Bank may transfer by novation all or any of its rights and obligations
         under this agreement to any of its affiliates to which it has
         transferred or is to transfer all or part of its business by delivering
         to the Company a notice signed by the Bank and that affiliate agreeing
         to the transfer. With effect from the date specified in that notice,
         the Bank shall be released from its obligations under this agreement
         and its rights under this agreement shall be cancelled and the
         affiliate shall assume obligations and acquire rights under this
         agreement as if that affiliate had originally been named in this
         agreement as a party in place of the Bank.

                     For these purposes, "affiliate" means, in relation to the
         Bank, any subsidiary or holding company of the Bank or any other
         subsidiary of any such holding company (within the meaning of section
         736 of the Companies Act 1985).

3.       CONDITIONS PRECEDENT. As conditions precedent to the effectiveness of
this Fourth Amendment, the Bank shall have received, each duly executed and in
form and substance satisfactory to the Bank, this Fourth Amendment, the
Promissory Note (Euro Revolving Loan) and the Overdraft Addendum.

4.       REIMBURSEMENT OF EXPENSES. All out-of-pocket expenses incurred by the
Bank associated with this Fourth Amendment, including without limitation, filing
fees, recording fees and legal fees and disbursements, are to be reimbursed by
the Company to the Bank promptly upon demand therefor.

                                       21
<PAGE>

5.       REPRESENTATIONS AND WARRANTIES. To induce the Bank to enter into this
Fourth Amendment, the Company represents and warrants, as of the date of this
Fourth Amendment, that no Event of Default or Unmatured Event of Default has
occurred and is continuing and that the representations and warranties contained
in Section 3 of the Agreement are true and correct, except that the
representations contained in Section 3.d refer to the latest financial
statements furnished to the Bank by the Company pursuant to the requirements of
the Agreement.

6.       REAFFIRMATION OF THE AGREEMENT. Except as amended by this Fourth
Amendment, all terms and conditions of the Agreement shall continue unchanged
and in full force and effect and the Obligations of the Company shall continue
to be secured and guaranteed as therein provided until payment and performance
in full of all Obligations.

7.       COUNTERPARTS. This Fourth Amendment may be signed in counterparts, each
of which shall constitute an original and all of which taken together will
constitute one and the same agreement.

                   [REMAINDER OF PAGE INTENTIONALLY LET BLANK]

                                       22
<PAGE>

         IN WITNESS WHEREOF, the Company and the Bank, by their duly authorized
officers, have executed this Fourth Amendment to Credit Agreement as of July 15,
2004.

                                          ESCALADE, INCORPORATED


                                          By: /s/ TERRY FRANDSEN
                                              ----------------------------------
                                              Terry Frandsen, Vice President and
                                                 Chief Financial Officer



                                          BANK ONE, N.A.


                                          By:
                                              -------------------------------

                                          Printed:
                                                   --------------------------

                                          Title:
                                                -----------------------------

                                       23

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>3
<FILENAME>ex10_2.txt
<DESCRIPTION>EXHIBIT 10.2
<TEXT>

                                  Exhibit 10.2
                                  ------------



                                 PROMISSORY NOTE
                              (Euro Revolving Loan)

                                                           Indianapolis, Indiana
                                                           Dated:  July 15, 2004
(euro)2,500,000.00                                 Final Maturity: July 15, 2006


         On or before July 15, 2006 ("Final Maturity"), ESCALADE, INCORPORATED,
an Indiana corporation (the "Maker"), promises to pay to the order of BANK ONE,
N.A., LONDON BRANCH (the "Bank") at the principal office of the Bank at London,
England, the principal sum of Two Million Five Hundred Thousand Euros
((euro)2,500,000.00) or so much of the principal amount of the Loan represented
by this Note as may be disbursed by the Bank under the terms of the Credit
Agreement described below, and to pay interest on the unpaid principal balance
outstanding from time to time as provided in the Credit Agreement.

         This Note evidences indebtedness (the "Loan") incurred or to be
incurred by the Maker under a revolving line of credit extended to the Maker by
the Bank under an Amended and Restated Credit Agreement effective October 24,
2001, as modified by a First Amendment to Amended and Restated Credit Agreement
dated August 29, 2002, as further modified by a Second Amendment to Amended and
Restated Credit Agreement dated April 17, 2003, as further modified by a Third
Amendment to Amended and Restated Credit Agreement dated June 1, 2003, and as
further modified by a Fourth Amendment to Amended and Restated Credit Agreement
dated the date of this Note (the "Agreement"). All references in this Note to
the Credit Agreement shall be construed as references to that Agreement as it
may be amended from time to time. The Loan is referred to in the Credit
Agreement as the "Euro Revolving Loan". Subject to the terms and conditions of
the Credit Agreement, the proceeds of the Loan may be advanced and repaid and
re-advanced until Final Maturity. The principal amount of the Loan outstanding
from time to time shall be determined by reference to the books and records of
the Bank on which all Advances under the Loan and all payments by the Maker on
account of the Loan shall be recorded. Such books and records shall be deemed
prima facie to be correct as to such matters.

         The terms "Advance" and "Banking Day" are used in this Note as defined
in the Credit Agreement.

         Interest on the unpaid principal balance of the Loan outstanding from
time to time prior to and after maturity will accrue at the rate or rates
provided in the Credit Agreement. Prior to maturity, accrued interest shall be
due and payable on the last Banking Day of each month commencing on the last
Banking Day of the month in which this Note is executed. After maturity,
interest shall be due and payable as accrued and without demand. Interest will
be calculated on the basis that an entire year's interest is earned in 360 days.

         The entire outstanding principal balance of this Note shall be due and
payable, together with accrued interest, at Final Maturity.

         If any installment of interest due under the terms of this Note is not
paid when due, then the Bank or any subsequent holder of this Note may, subject
to the terms of the Credit Agreement, at its option and without notice, declare
the entire principal amount of the Note and all accrued interest immediately due
and payable. Reference is made to the Credit Agreement which provides for
acceleration of the maturity of this Note upon the happening of other "Events of
Default" as defined therein.

         If any installment of interest due under the terms of this Note prior
to maturity is not paid in full when due, then the Bank at its option and
without prior notice to the Maker, may assess a late payment fee as provided in
the Credit Agreement. Each late payment fee assessed shall be due and payable on
the earlier of the next regularly scheduled interest payment date or the
maturity of this Note. Waiver by the Bank of any late payment fee assessed, or
the failure of the Bank in any instance to assess a late payment fee shall not
be construed as a waiver by the Bank of its right to assess late payment fees
thereafter.

         Unless otherwise agreed to, in writing, or otherwise required by
applicable law, payments will be applied first to accrued, unpaid interest, then

                                       24
<PAGE>

to principal, and any remaining amount to any unpaid collection costs, late
charges and other charges, provided, however, upon delinquency or other default,
Bank reserves the right to apply payment among principal, interest, late
charges, collection costs and other charges at its discretion. All prepayments
shall be applied to the indebtedness owing hereunder in such order and manner as
Bank may from time to time determine in its sole discretion.

         The Maker and any endorsers severally waive demand, presentment for
payment and notice of nonpayment of this Note, and each of them consents to any
renewals or extensions of the time of payment of this Note without notice.

         All amounts payable under the terms of this Note shall be payable with
expenses of collection, including attorneys' fees, and without relief from
valuation and appraisement laws.

         This Note is made under and will be governed in all cases by the
substantive laws of the State of Indiana, notwithstanding the fact that Indiana
conflicts of law rules might otherwise require the substantive rules of law of
another jurisdiction to apply.

         MAKER AND BANK (BY ITS ACCEPTANCE OF THIS NOTE) HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON A CONTRACT, TORT OR
OTHERWISE) BETWEEN MAKER AND BANK ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT, ANY OTHER LOAN DOCUMENT, OR ANY RELATIONSHIP BETWEEN BANK AND MAKER.
THIS PROVISION IS A MATERIAL INDUCEMENT TO BANK TO PROVIDE THE FINANCING
DESCRIBED HEREIN OR IN OTHER LOAN DOCUMENTS.

                                            ESCALADE, INCORPORATED



                                            By: /s/ TERRY FRANDSEN
                                                --------------------------------

                                            Printed:  Terry Frandsen

                                            Title:    VP Finance - CFO

                                       25

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>4
<FILENAME>ex10_3.txt
<DESCRIPTION>EXHIBIT 10.3
<TEXT>

                                  Exhibit 10.3
                                  ------------




                         UNCOMMITTED OVERDRAFT FACILITY

                -------------------------------
The Company:        ESCALADE, INC                has requested and  BANK ONE, NA
                -------------------------------

BANK ONE, NA (the "Bank") has agreed to make available an uncommitted
multicurrency overdraft facility (the "Facility") on the basis of the terms and
conditions specified in this document. This document has been executed by the
parties hereto to signify their agreement to the terms and conditions which
follow this page.


<TABLE>
<CAPTION>
                -------------------------------                --------------------------------
<S>               <C>                           <C>              <C>
By:               BANK ONE, NA                  By:              ESCALADE, INC
                -------------------------------                --------------------------------


                -------------------------------                --------------------------------
Signature:        /s/ BRIAN D. SMITH            Signature:       /s/ TERRY FRANDSEN
                -------------------------------                --------------------------------


                -------------------------------                --------------------------------
Name:             BRIAN D. SMITH                Name:            TERRY FRANDSEN

                -------------------------------                --------------------------------


                -------------------------------                --------------------------------
Title:            FIRST VICE PRESIDENT          Title:           CHIEF FINANCIAL OFFICER
                -------------------------------                --------------------------------


                -------------------------------                --------------------------------
Date:                                           Date:
                -------------------------------                --------------------------------


                -------------------------------                --------------------------------
Address:        BANK ONE, NA                    Address:
                LONDON BRANCH
                1 TRITON SQUARE
                LONDON NW1 3FN
                UNITED KINGDOM
                -------------------------------                --------------------------------


                                                               --------------------------------
                                                Process
                                                Agent
                                                (Name):
                                                               --------------------------------

                                                Address:

                                                               --------------------------------
</TABLE>

                                       26
<PAGE>

                              TERMS AND CONDITIONS


1        Interpretation and definitions

1.1      In these terms and conditions:

         "Acceptance Date" means the date appearing below the Company's
         signature on the first page of these terms and conditions or, in the
         absence of any such date, the first date after the Offer Date on which
         a debit balance occurs on any of the Company's accounts with the Bank.

         "Additional Borrower" shall have the meaning ascribed to it in Clause
         7.

         "Authorised Signatory" means any person authorised to give and sign on
         behalf of the Company any request, notice, instruction or other
         document to be delivered by the Company pursuant hereto as the same may
         be notified to the Bank in writing from time to time.

         "Board Resolution Certificate" means a certificate signed by the
         secretary or a director of the Company substantially in the form set
         out in Schedule 3 (in respect of a resolution of the board of directors
         of the Company approving the Facility and authorising one or more
         specified persons to sign these terms and conditions and give
         instructions to the Bank in connection herewith).

         "Business Day" means a day on which banks are open for business in
         London.

         "Default Margin" means the percentage rate per annum specified as such
         in Schedule 1 or such other rate as the Bank may notify to the Company
         in writing from time to time.

         "$" and "Dollars" means the lawful currency for the time being of the
         United States of America.

         "Facility Amount" means the amount specified as such in Schedule 1 or
         such other amount as the Bank may notify to the Company in writing from
         time to time.

         "Netted Accounts" shall have the meaning ascribed to it in Clause 12.3.

         "Offer Date" means the date appearing below the Bank's signature on the
         first page of these terms and conditions.

         "Optional Currency" means any currency which is freely transferable and
         convertible into Dollars and acceptable to the Bank for the purposes of
         the Facility.

         "Overdraft Rate" means the rate per annum specified in, or calculated
         in accordance with the provisions of, Schedule 1 or such other rate as
         the Bank may notify to the Company in writing from time to time.

         "Overdrafts" means the overdrafts made or to be made available pursuant
         to these terms and conditions.

         "Process Agent" means the person specified as such on the first page of
         these terms and conditions.

         "Relevant Entities" means the entities (if any) specified as such in
         Schedule 1.

         "Successor" means any assignee or successor in title of the Bank or any
         person who, under laws of its jurisdiction of incorporation or
         domicile, has assumed the rights and obligations of the Bank under
         these terms and conditions or to which under such laws the same have
         been transferred.

1.2      In these terms and conditions, any reference to a "Clause" or a
         "Schedule" is, unless otherwise stated, a reference to a Clause of or a
         Schedule to these terms and conditions.

1.3      Clause and Schedule headings are for ease of reference only.

                                       27
<PAGE>

2.       Amount and type of Facility

         The Facility may be used by way of Overdrafts on the Company's Dollar
         and/or Optional Currency current accounts with the Bank provided that
         at no time shall the aggregate Dollar equivalent of all amounts
         outstanding under the Facility exceed the Facility Amount.

3.       Availability of Facility

3.1      The Facility will not be available to the Company until the Bank has
         notified the Company that it has received each of the documents
         described in Schedule 2, in form and substance satisfactory to the
         Bank.

3.2      Subject to these terms and conditions, the Overdrafts may be used at
         any time and all drawings thereunder shall be debited to the Company's
         Dollar or Optional Currency current account, as the case may be, with
         the Bank.

3.3      The Facility is of an uncommitted nature. Accordingly, there is no
         obligation on the Bank's part to agree to any request or utilisation
         made by the Company. In the event of any inconsistency between the
         terms of any request or utilisation and these terms and conditions,
         these terms and conditions shall prevail.

4.       Interest

4.1      Interest is payable monthly or quarterly in arrear (as specified in
         Schedule 1) on the amounts outstanding from day to day by way of
         Overdrafts at the Overdraft Rate at the relevant time. The Bank may
         debit such interest to the Company's Dollar or relevant Optional
         Currency account provided that, if this would result in the amounts
         outstanding by way of Overdrafts exceeding the Facility Amount, the
         Company will on demand pay the amount of such interest to the Bank.

4.2      Interest shall be calculated on the basis of a 360-day year (or, if
         market practice differs, in accordance with market practice) and for
         the actual number of days elapsed.

4.3      The Company shall from time to time on demand by the Bank pay interest
         (both before and after judgment) on each amount payable by the Company
         under these terms and conditions but unpaid, from the due date up to
         the date of actual payment. The rate of interest shall be a rate
         determined by the Bank from time to time to be equal to the cost
         (expressed as a percentage rate per annum) to the Bank of funding such
         unpaid sum (from whatever source the Bank may select), plus the Default
         Margin.

5.       Repayment

         The Overdrafts shall be repayable forthwith on demand.

6.       Cancellation

         Notwithstanding any other provision of these terms and conditions, the
         Bank may at any time and regardless of the purpose of the Facility by
         notice to the Company (which notice shall be effective immediately)
         terminate the availability of the Facility immediately and/or declare
         all amounts outstanding hereunder immediately due and payable,
         whereupon the Company will forthwith repay to the Bank all Overdrafts
         outstanding together with accrued interest thereon and all other
         amounts payable to the Bank hereunder.

7.       Additional Borrowers

7.1      If indicated as applicable in Schedule 1 (or as otherwise agreed in
         writing from time to time) the Company may from time to time by written
         notice to the Bank request that one or more of the Company's affiliates
         become additional borrowers under the Facility. If the Bank (in its
         discretion) accepts any such request, each of the Company, the Bank and
         each affiliate specified in such notice shall enter into an agreement
         supplemental to these terms and conditions and substantially in the
         Bank's standard form from time to time.

                                       28
<PAGE>

7.2      When such supplemental agreement has been executed and delivered and
         the Bank has confirmed that it has received (in form and substance
         satisfactory to the Bank) all the documents specified therein as
         conditions precedent to its effectiveness, the affiliate named therein
         shall thereupon become an Additional Borrower for the purposes of these
         terms and conditions. Each Additional Borrower shall have all the
         rights of a borrower under the Facility subject to these terms and
         conditions.

7.3      The Company and each Additional Borrower shall be severally liable to
         the Bank in respect of their respective obligations under or pursuant
         to the Facility, and these terms and conditions shall be construed
         accordingly. If, in relation to the Company or any Additional Borrower,
         any such obligation is or becomes void, invalid, not binding or
         unenforceable for any reason whatsoever or if the Bank (in its
         discretion) releases or varies the terms of any obligation or takes or
         fails to take any other action in respect of any obligation, the
         obligations under these terms and conditions of each Additional
         Borrower or, as the case may be, the Company shall nevertheless remain
         valid, binding and enforceable by the Bank; and the Bank shall not in
         any circumstances whatsoever have any liability to the Company or any
         Additional Borrower as a consequence of any of the foregoing.

8.       Increased Costs

         If the Bank determines that compliance with any law or regulation or
         any guideline or request from any central bank or other governmental,
         monetary or regulatory authority (whether or not having the force of
         law) affects or would affect the manner in which capital is allocated
         or the amount of capital required or expected to be maintained by the
         Bank or by any holding company of the Bank, or with any other law or
         regulation or other guideline or request from any central bank or other
         governmental, monetary or regulatory authority, and that such
         compliance would (i) create a cost or increase the cost to the Bank or
         such holding company of funding or maintaining any of the Overdrafts
         and/or (ii) reduce the rate of return on the overall capital of the
         Bank or such holding company, then the Company shall from time to time
         on demand pay to the Bank amounts sufficient to indemnify the Bank or
         such holding company against such proportion of such cost or increased
         cost and/or such reduction as is in the Bank's opinion attributable to
         any of the Overdrafts under this Agreement.

9.       Payments

9.1      All payments to be made under these terms and conditions shall be made
         to the Bank:

         (a)      if in Dollars, in Dollar funds settled through the New York
                  Clearing House Interbank Payments System for value on the due
                  date to the head office in New York of JPMorgan Chase Bank for
                  the account of its London branch; and

         (b)      if in any Optional Currency, on such date and at such time as
                  the Bank may notify to the Company to ensure same day value on
                  the due date in immediately available funds of the relevant
                  currency, freely convertible and transferable into Dollars, to
                  the Bank's account at such bank in such jurisdiction as the
                  Bank may from time to time nominate for the purpose.

9.2      Each payment by the Company to the Bank shall be without any deduction
         or withholding whatsoever. If the Company is obliged by law to make any
         deduction or withholding from any such payment, the amount due from the
         Company in respect of such payment shall be increased to the extent
         necessary to ensure that, after the making of such deduction or
         withholding, the Bank receives a net amount equal to the amount the
         Bank would have received had no such deduction or withholding been
         required to be made. In the event of such payment the Company will
         deliver promptly to the Bank such tax receipts or other documentation
         as it may require.

9.3      All payments by the Company to the Bank hereunder shall be made without
         set-off or counterclaim.

9.4      The Bank may from time to time utilise such payment or settlement
         system as it may in its discretion select for the purpose of making any
         payment to the Company or as it may direct, and the Bank shall not be
         liable for any delay, or the consequences of any delay, by any such
         payment or settlement system in effecting any such payment.

                                       29
<PAGE>

10.      Representations

         The Company represents and warrants that:

         (a)      these terms and conditions are the Company's legally binding
                  obligations enforceable in accordance with their terms;

         (b)      no consents or authorisations whatsoever are required in
                  relation to these terms and conditions; and

         (c)      neither these terms and conditions nor use of the Facility
                  will contravene its constitutional documents or any agreement
                  to which it is a party or entitle any person to exercise any
                  rights against the Company's assets pursuant to any such
                  agreement.

11.      Covenants

         So long as the Facility is available to the Company or any amount is
         outstanding hereunder, the Company will:

         (a)      not, without the prior written consent of the Bank (i) create
                  or permit to subsist any mortgage, charge, lien or other
                  encumbrance or (ii) enter into or permit to subsist any
                  agreement or arrangement the purpose of which is to place a
                  person in a position which is similar (or similar except as
                  regards the nature of such person's legal rights) to that
                  which would have been occupied had such person possessed a
                  mortgage, charge, pledge, lien or other encumbrance, in either
                  case on all or any part of the present or future undertaking,
                  property or assets of the Company or any of the Relevant
                  Entities (if applicable); and

         (b)      ensure that all amounts outstanding hereunder will at all
                  times rank at least pari passu in right of repayment and in
                  point of security with all the Company's other present and
                  future unsubordinated indebtedness.

12.      Miscellaneous

12.1     No failure by the Bank in exercising any right, power or privilege
         hereunder shall operate as a waiver thereof or prejudice any other or
         further exercise by the Bank of any of its rights or remedies
         hereunder. The rights and remedies herein are cumulative and not
         exclusive of any rights or remedies provided by law.

12.2     Without prejudice to the Bank's rights under applicable law, it may set
         off against any amount owing by the Company to the Bank hereunder any
         amount in any currency standing to the credit of any of the Company's
         accounts (whether current, deposit or otherwise) with the Bank
         anywhere. The Bank shall be entitled to accelerate the maturity of any
         fixed term deposits for such purpose. Any currency conversions
         necessary for the purposes hereof shall be at the Bank's then current
         rates for the sale and purchase of the relevant currencies.

12.3     Without prejudice to Clause 12.2 the Company hereby certifies that all
         accounts in its name maintained with the Bank from time to time,
         including the accounts to which the Overdrafts are debited, (all such
         accounts being the "Netted Accounts") are, and shall at all times be,
         owned and held by the Company in the same legal right and capacity. The
         Bank is authorised to treat the Netted Accounts as a single account and
         consequently may set off any credit balance on any one of them against
         any debit balance on any other. The Bank or the Company may, at any
         time, identify any account to be excluded from the Netted Accounts by
         not less than three Business Days' prior written notice to the other.
         If any Netted Account becomes subject to an adverse claim or otherwise
         becomes held in another right or capacity from the remainder of the
         Netted Accounts, it will be excluded from the Netted Accounts as of the
         Business Day immediately prior to the date of such change.

12.4     In the absence of manifest error the Bank's statement of the rate of
         interest, the amount outstanding hereunder or any other amount payable
         hereunder shall be conclusive.

12.5     The Dollar equivalent of any Optional Currency shall, for the purposes
         hereof, be determined at the spot rate of exchange quoted by the Bank
         for the purchase of relevant Optional Currency with Dollars at such
         place and at such time as the Bank deems appropriate on the day on
         which the Dollar equivalent falls to be determined.

12.6     These terms and conditions shall remain in effect despite any
         amalgamation or merger (however effected) relating to the Bank; and
         references to the Bank shall be deemed to include its Successors.

                                       30
<PAGE>

12.7     If indicated as being applicable in Schedule 1, as at the Acceptance
         Date, these terms and conditions replace all other agreements between
         the Bank and the Company relating to the provision of overdrafts which
         shall as of the Acceptance Date cease to have any effect.

12.8     The terms and conditions set out herein shall be deemed to take effect
         on the Acceptance Date and shall also apply to any debit balances on
         any of the Company's accounts with the Bank which exceed the Facility
         Amount from time to time.

12.9     These terms and conditions may be enforced only by a party to them or
         such party's successors and permitted assigns.

13.      Costs and expenses

         The Company shall pay all costs and expenses (including all legal fees)
         incurred by the Bank in connection with the enforcement of these terms
         and conditions and the preservation of its rights hereunder.

14.      Notices

14.1     Any request, notice, instruction or demand to be given or served on the
         Company or the Bank under or pursuant to these terms and conditions may
         be given or served by leaving the same at the address specified on the
         first page of these terms and conditions under the name of the Company
         or the Bank (as the case may be) or posting the same (by prepaid
         first-class post) by letter addressed to such address, or by facsimile
         to the facsimile number specified on the first page of these terms and
         conditions under the name of the Company or the Bank (as the case may
         be). Any request, notice, instruction or demand sent by post in
         accordance with this Clause to any destination in the United Kingdom
         shall be deemed to have been served at 10 a.m. (London time) on the
         second day following the date of posting or, in the case of a
         destination outside the United Kingdom, at 10 a.m. (London time) on the
         fourth day following and exclusive of the date of posting; or, if sent
         by facsimile, shall be deemed to have been served when despatched. In
         proving such service by post it shall be sufficient to show that the
         letter containing the request, notice, instruction or demand was
         properly addressed and posted and such proof of service shall be
         effective notwithstanding that the letter was in fact not delivered or
         was returned undelivered.

14.2     Any request, notice or instruction to be served on the Bank shall be
         effective only when actually received by the Bank.

14.3     The Company agrees to be bound by any request, notice or instruction
         given in the name of the Company by letter or facsimile which bears or
         purports to bear the signature of any Authorised Signatory whether or
         not such request, notice or instruction was actually authorised by the
         Company.

15.      Assignment

         The Company may not assign or otherwise transfer the benefit or burden
         of the Facility. The Bank may at its discretion assign and/or transfer
         all or part of its rights and/or obligations under the Facility. The
         Bank may disclose to any actual or proposed assignee, transferee or
         other person with whom it may enter into contractual relations in
         connection herewith any such information about the Company as the Bank
         may consider appropriate.

16.      Service of process

         If indicated in Schedule 1 as being applicable, the process by which
         any suit, action or proceedings are begun in England may be served on
         the Company by being delivered to the Process Agent at the address
         specified on the first page of these terms and conditions or such
         person's registered office for the time being. If the appointment of
         the Process Agent ceases to be effective, the Company shall immediately
         appoint another person in England to accept service of process on its
         behalf in England; and, if the Company fails to appoint such other
         person within 15 days, the Bank shall be entitled to appoint such other
         person by notice to the Company. The right of either party to serve
         process in any other manner permitted by law shall not be affected.

                                       31
<PAGE>

17.      Law and jurisdiction

         These terms and conditions shall be governed by and construed in
         accordance with English law, and for the Bank's benefit the Company
         irrevocably submits to the jurisdiction of the English courts (without
         limiting the right of either party to take proceedings in any other
         court of competent jurisdiction).


SCHEDULE 1


                            ----------------------------------------------------
1.    Overdraft Rate:         Two per cent (2%) plus the Bank's base rate (as
                              determined by the Bank in its sole discretion
                              having regard to prevailing market rates) as may
                              be applicable from time to time for GBP or in the
                              case of euros the rate per annum which is
                              published by the European Central Bank by the
                              opening of TARGET and is applied in arrears at or
                              about 09:00 London time for each applicable day
                              for euros.
                            ----------------------------------------------------

                            ----------------------------------------------------
2.    Default Margin:         Interest shall be paid on any overdue sum under
                              this agreement (both before and after judgment) at
                              the annual rate determined by the Bank to be 3 per
                              cent. per annum above the rate referred to in
                              Overdraft Rate.
                            ----------------------------------------------------

                            ----------------------------------------------------
3.    Facility Amount:        No utilisation of the Facility shall be permitted
                              if, as a result, the amount of the Overdraft
                              Facility would exceed euro 1,000,000 (one million)
                              and GBP 500,000 (five hundred thousand pounds
                              sterling).
                            ----------------------------------------------------

                            ----------------------------------------------------
4.    Payment of Interest     Monthly
      under Clause 4.1:
                            ----------------------------------------------------

                            ----------------------------------------------------
5.    Relevant Entities:      ESCALADE, INC
                            ----------------------------------------------------

                            ----------------------------------------------------
6.    Applicability of        Not Applicable
      Clause 7:

                            ----------------------------------------------------

                            ----------------------------------------------------
7.    Applicability of        Not Applicable
      Clause 12.7:
                            ----------------------------------------------------

                            ----------------------------------------------------
8.    Applicability of        Applicable - Process Agent appointed
      Clause 16:
                            ----------------------------------------------------

                                       32

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.1
<SEQUENCE>5
<FILENAME>ex31_1.txt
<DESCRIPTION>EXHIBIT 31.1
<TEXT>

                                  Exhibit 31.1
                                  ------------

                    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 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 report;

3. Based on my knowledge, the financial statements, and other financial
information included in this 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 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-15(e) and 15d-15(e )) for the registrant and we have:

         a) designed such disclosure controls and procedures, or caused such
         disclosure controls and procedures to be designed under our
         supervision, 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 report is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
         and procedures and presented in this report our conclusions about the
         effectiveness of the disclosure controls and procedures, as of the end
         of the period covered by this report based on such evaluation; and

         c) disclosed in this report any change in the registrant's internal
         control over financial reporting that occurred during the registrant's
         most recent fiscal quarter that has materially affected, or is
         reasonably likely to materially affect, the registrant's internal
         control over financial reporting; and

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 and material weaknesses in the design
         or operation of internal control over financial reporting which are
         reasonably likely to adversely affect the registrant's ability to
         record, process, summarize and report financial information; and

         b) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal control over financial reporting.

Date: October 22, 2004                          /s/ C. W. (BILL) REED
                                                -----------------------------
                                                Chief Executive Officer

                                       33

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-31.2
<SEQUENCE>6
<FILENAME>ex31_2.txt
<DESCRIPTION>EXHIBIT 31.2
<TEXT>

                                  Exhibit 31.2
                                  ------------

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Terry D. Frandsen, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Escalade, Incorporated;

2. Based on my knowledge, this 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 report;

3. Based on my knowledge, the financial statements, and other financial
information included in this 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 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-15(e) and 15d-15(e)) for the registrant and we have:

         a) designed such disclosure controls and procedures, or caused such
         disclosure controls and procedures to be designed under our
         supervision, 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 report is being prepared;

         b) evaluated the effectiveness of the registrant's disclosure controls
         and procedures and presented in this report our conclusions about the
         effectiveness of the disclosure controls and procedures, as of the end
         of the period covered by this report based on such evaluation; and

         c) disclosed in this report any change in the registrant's internal
         control over financial reporting that occurred during the registrant's
         most recent fiscal quarter that has materially affected, or is
         reasonably likely to materially affect, the registrant's internal
         control over financial reporting; and

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 and material weaknesses in the design
         or operation of internal control over financial reporting which are
         reasonably likely to adversely affect the registrant's ability to
         record, process, summarize and report financial information; and

         b) any fraud, whether or not material, that involves management or
         other employees who have a significant role in the registrant's
         internal control over financial reporting.

Date: October 22, 2004                         /s/ TERRY D. FRANDSEN
                                               --------------------------------
                                               Chief Financial Officer

                                       34

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.1
<SEQUENCE>7
<FILENAME>ex32_1.txt
<DESCRIPTION>EXHIBIT 32.1
<TEXT>

                                  Exhibit 32.1
                                  ------------


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Escalade, Incorporated (the
"Company") on Form 10-Q for the period ending October 02, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, C. W.
(Bill) Reed, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that:

         (1) The Report fully complies with the requirements of section 13(a) or
15 (d) of the Securities Exchange Act of 1934; and

         (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.


/s/ C. W. (BILL) REED
- -----------------------------
C. W. (Bill) Reed
Chief Executive Officer
October 22, 2004

                                       35

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-32.2
<SEQUENCE>8
<FILENAME>ex32_2.txt
<DESCRIPTION>EXHIBIT 32.2
<TEXT>
                                  Exhibit 32.2
                                  ------------


                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002


In connection with the Quarterly Report of Escalade, Incorporated (the
"Company") on Form 10-Q for the period ending October 02, 2004 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Terry
D. Frandsen, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. ss. 1350, as adopted pursuant to ss. 906 of the Sarbanes-Oxley Act of
2002, that:

         (1) The Report fully complies with the requirements of section 13(a) or
15 (d) of the Securities Exchange Act of 1934; and

         (2) The information contained in the Report fairly presents, in all
material respects, the financial condition and result of operations of the
Company.


/s/ TERRY D. FRANDSEN
- ----------------------------
Terry D. Frandsen
Chief Financial Officer
October 22, 2004

                                       36

</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
