<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 July 9, 2005
                          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 July 26, 2005: 13,062,973

                                       1
<PAGE>

                                      INDEX


                                                                           Page
                                                                            No.

Part I.   Financial Information:

Item 1 -  Financial Statements:

          Consolidated Condensed Balance Sheets as of July 9, 2005
          (Unaudited), July 10, 2004 (Unaudited), and December 25, 2004      3

          Consolidated Condensed Statements of Income (Unaudited)
          for the Three Months and Six Months Ended July 9, 2005
          and July 10, 2004                                                  4

          Consolidated Condensed Statements of Comprehensive
          Income (Unaudited) for the Three Months and Six Months
          Ended July 9, 2005 and July 10, 2004                               4

          Consolidated Condensed Statements of Cash Flows (Unaudited)
          for the Six Months Ended July 9, 2005 and July 10, 2004            5

          Notes to Consolidated Condensed Financial Statements               6

Item 2 -  Management's Discussion and Analysis of Financial Condition
          and Results of Operations                                          8

Item 3 -  Quantitative and Qualitative Disclosures about Market Risk        11

Item 4 -  Controls and Procedures                                           12

Part II.  Other Information

Item 2 -  Issuer Purchases of Equity Securities                             12

Item 5 -  Other Matters                                                     13

Item 6 -  Exhibits                                                          13

          Signatures                                                        14

                                       2
<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>
                                                              July 9,      July 10,       December
                                                               2005          2004         25, 2004
                                                           -----------   -----------    -----------
                                                           (Unaudited)   (Unaudited)
<S>                                                        <C>           <C>            <C>
ASSETS
Current Assets:
       Cash and cash equivalents                           $     3,045   $     1,231    $     3,050
       Receivables, less allowance of
          $2,146; $1,772; and $2,510; respectively              33,266        35,530         44,363
       Inventories                                              37,075        41,435         30,482
       Prepaid expenses                                          2,617         1,022          3,011
       Deferred income tax benefit                               2,132         2,456          2,496
                                                           -----------   -----------    -----------
TOTAL CURRENT ASSETS                                            78,135        81,674         83,402

Property, plant and equipment, net                              14,660        16,370         16,498
Intangible assets                                                7,148         8,276          8,019
Goodwill                                                        17,208        18,715         17,888
Investments                                                      5,791         5,386          6,446
Other assets                                                     2,493         2,999          2,846
                                                           -----------   -----------    -----------
                                                           $   125,435   $   133,420    $   135,099
                                                           ===========   ===========    ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
       Notes payable                                       $     1,658   $    12,228    $    11,638
       Current portion of long-term debt                           946           354            354
       Trade accounts payable                                    8,322        14,265          8,034
       Accrued liabilities                                      17,815        16,263         27,438
       Income tax payable                                          454          (259)           142
                                                           -----------   -----------    -----------
TOTAL CURRENT LIABILITIES                                       29,195        42,851         47,606

Other Liabilities:
       Long-term debt                                           27,030        26,470         15,896
       Interest rate swap agreement                                 93           570            386
       Deferred compensation                                     1,294         1,480          1,233
                                                           -----------   -----------    -----------
                                                                28,417        28,520         17,515

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 - 13,062,973;
          13,038,664; and 13,031,064; respectively              13,063        13,039         13,031
Retained earnings                                               53,529        47,257         52,394
Accumulated other comprehensive income                           1,231         1,753          4,553
                                                           -----------   -----------    -----------
                                                                67,823        62,049         69,978
                                                           -----------   -----------    -----------
                                                           $   125,435   $   133,420    $   135,099
                                                           ===========   ===========    ===========
</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              Six Months Ended
                                               --------------------------------------------------------
                                                 July 9,        July 10,       July 9,        July 10,
                                                  2005            2004          2005            2004
                                               -----------    -----------    -----------    -----------
<S>                                            <C>            <C>            <C>            <C>
Net sales                                      $    47,551    $    52,516    $    77,333    $    86,174

Costs, expenses and other income:
    Cost of products sold                           32,348         37,125         53,207         61,643
    Selling, general and
       administrative expenses                      11,304         12,088         18,479         19,736
                                               -----------    -----------    -----------    -----------
    Operating income                                 3,899          3,303          5,647          4,795

    Interest expense, net                             (494)          (573)          (780)          (938)
    Other income                                       162            319            407            301
                                               -----------    -----------    -----------    -----------
Net income before income taxes                       3,567          3,049          5,274          4,158

Provision for income taxes                           1,312          1,096          1,865          1,607
                                               -----------    -----------    -----------    -----------

Net income                                     $     2,255    $     1,953    $     3,409    $     2,551
                                               ===========    ===========    ===========    ===========

Per Share Data:
    Basic earnings per share                   $      0.17    $      0.15    $      0.26    $      0.20
    Diluted earnings per share                 $      0.17    $      0.15    $      0.26    $      0.19



CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

Net income                                     $     2,255    $     1,953    $     3,409    $     2,551

Unrealized gain (loss) on
    securities, net of tax                              25            (49)             4              7

Foreign currency translation adjustment             (2,898)          (280)        (3,516)          (616)

Unrealized gain on interest rate swap
    agreement net of taxes                             136             97            191            115
                                               -----------    -----------    -----------    -----------

Comprehensive income                           $      (482)   $     1,721    $        88    $     2,057
                                               ===========    ===========    ===========    ===========
</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>
                                                                  Six Months Ended
                                                           -----------------------------
                                                            July 9, 2005   July 10, 2004
                                                           -------------   -------------
<S>                                                         <C>            <C>
Operating Activities:
     Net income                                            $       3,409   $       2,551
     Depreciation and amortization                                 2,654           2,744
     Adjustments necessary to reconcile net
         income to net cash provided by
         operating activities                                     (1,139)         (4,471)
                                                           -------------   -------------
     Net cash provided by operating activities                     4,924             824

Investing Activities:
     Purchase of property and equipment                             (901)           (948)
     Proceeds from asset disposition                                  68              --
     Acquisition of assets                                        (3,213)             --
                                                           -------------   -------------
     Net cash used by investing activities                        (4,046)           (948)

Financing Activities:
     Net increase in notes payable                                 1,541           2,054
     Proceeds from exercise of stock options                         389           1,083
     Purchase of common stock                                       (670)           (819)
     Dividends paid                                               (1,961)         (1,556)
                                                           -------------   -------------
     Net cash provided (used) by financing activities               (701)            762
                                                           -------------   -------------


Effect of exchange rate changes on cash                             (182)            (55)
                                                           -------------   -------------
Net increase (decrease) in cash and cash equivalents                  (5)            583
Cash and cash equivalents, beginning of period                     3,050             648
                                                           -------------   -------------
Cash and cash equivalents, end of period                   $       3,045   $       1,231
                                                           =============   =============
</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 25, 2004 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 2004 filed with
the Securities and Exchange Commission.


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

The results of operations for the six-month periods ended July 9, 2005 and July
10, 2004 are not necessarily indicative of the results to be expected for the
full year.


Note C - Inventories
--------------------------------------------------------------------------------

      (All amounts in thousands)    July 9,      July 10,    December 25,
                                     2005          2004          2004

       Raw materials             $     8,550   $    10,725   $     8,562
       Work in progress                7,019         6,975         5,142
       Finished goods                 21,506        23,735        16,778
                                 -----------   -----------   -----------
                                 $    37,075   $    41,435   $    30,482
                                 ===========   ===========   ===========


Note D - Notes Payable
--------------------------------------------------------------------------------

On June 27, 2005 the Company executed a fifth amendment to the revolving term
agreement that effectively increased the current available borrowing limit by
$10 million to $31 million and extended the termination date of the agreement by
two months to May 2008. All other terms of the agreement were unchanged. As of
July 9, 2005 the outstanding balance on this line was $21.8 million.


Note E - Income Taxes
--------------------------------------------------------------------------------

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


Note F - Dividend Payment
--------------------------------------------------------------------------------

On March 18, 2005, the Company paid a dividend of $0.15 per common share to all
shareholders of record on March 11, 2005. The total amount of the dividend was
$2 million and was charged against retained earnings.

                                       6
<PAGE>

Note G - 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
                                                     ---------------------------
     All amounts in thousands                        July 9, 2005  July 10, 2004
     ---------------------------------------------------------------------------
     Weighted average common shares outstanding            13,069        13,018
     Dilutive effect of stock options                         176           276
                                                      -----------   -----------
     Weighted average common shares outstanding,
        assuming dilution                                  13,245        13,294
                                                      ===========   ===========

                                                           Six Months Ended
                                                     ---------------------------
     All amounts in thousands                        July 9, 2005  July 10, 2004
     ---------------------------------------------------------------------------
     Weighted average common shares outstanding            13,064        12,949
     Dilutive effect of stock options                         168           276
                                                      -----------   -----------
     Weighted average common shares outstanding,
        assuming dilution                                  13,232        13,225
                                                      ===========   ===========

In 2004 and 2005, the effect of 168,800 employee stock options was anti-dilutive
as to earnings per share and is ignored in the computation of the dilutive
earnings per share in those periods.

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


Note H - 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.

                                                    Three Months Ended
                                               ----------------------------
      (In Thousands Except Per Share Amounts)
                                               July 9, 2005   July 10, 2004
      ---------------------------------------------------------------------

      Net income, as reported                    $   2,255      $   1,953
      Less: Total stock-based employee
          compensation cost determined
          under the fair value based
          method, net of income taxes                 (279)          (194)
                                                 ---------      ---------

      Pro forma net income                       $   1,976      $   1,759
                                                 =========      =========

      Earnings per share
          Basic--as reported                     $    0.17      $    0.15
                                                 =========      =========
          Basic--pro forma                       $    0.15      $    0.14
                                                 =========      =========

          Diluted--as reported                   $    0.17      $    0.15
                                                 =========      =========
          Diluted--pro forma                     $    0.15      $    0.13
                                                 =========      =========

                                       7
<PAGE>

                                                      Six Months Ended
                                                ---------------------------
      (In Thousands Except Per Share Amounts)
                                                July 9, 2005  July 10, 2004
      ---------------------------------------------------------------------

      Net income, as reported                     $   3,409      $   2,551
       Less: Total stock-based employee
          compensation cost determined
          under the fair value based method,
          net of income taxes                          (558)          (389)
                                                  ---------      ---------

      Pro forma net income                        $   2,851      $   2,162
                                                  =========      =========

      Earnings per share
          Basic--as reported                      $    0.26      $    0.20
                                                  =========      =========
          Basic--pro forma                        $    0.22      $    0.17
                                                  =========      =========

          Diluted--as reported                    $    0.26      $    0.19
                                                  =========      =========
          Diluted--pro forma                      $    0.22      $    0.16
                                                  =========      =========


Note I - Segment Information
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                         As of and for the Six Months
                                                               Ended July 9, 2005
                                              ---------------------------------------------------
                                               Sporting      Office
      In thousands                               Goods      Products       Corp.         Total
      -------------------------------------------------------------------------------------------
<S>                                           <C>          <C>          <C>           <C>
      Revenues from external customers        $   42,590   $   34,743   $       --    $   77,333
      Operating income (loss)                      3,003        4,089       (1,445)        5,647
      Net income (loss)                            1,497        2,539         (627)        3,409
      Total assets                            $   64,992   $   48,716   $   11,727    $  125,435
</TABLE>

<TABLE>
<CAPTION>
                                                         As of and for the Six Months
                                                              Ended July 10, 2004
                                              ---------------------------------------------------
                                               Sporting      Office
      In thousands                               Goods      Products       Corp.         Total
      -------------------------------------------------------------------------------------------
<S>                                           <C>          <C>          <C>           <C>
      Revenues from external customers        $   44,751   $   41,423   $       --    $   86,174
      Operating income (loss)                      4,198        2,537       (1,940)        4,795
      Net income (loss)                            2,184        1,024         (657)        2,551
      Total assets                            $   64,157   $   61,222   $    8,041    $  133,420
</TABLE>


Note J - Reclassifications
--------------------------------------------------------------------------------

Certain reclassifications have been made to the 2004 financial statements to
conform to the 2005 financial statement presentation.



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

                                       8
<PAGE>

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.

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 commanding 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. A key strategic
advantage is the Company's established relationships with major customers that
allow the Company to bring new products to the market in a very cost effective
manner while maintaining a diversified product line and wide customer base. 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

Compared to the same periods last year, consolidated net income for the second
quarter and first half of fiscal 2005 increased 15.5% and 33.6%, respectively.
The primary factor for the increased profitability was the improved
profitability of the Office Products business; a direct result of cost
reductions, product rationalization and management restructuring. For the second
quarter and first half of fiscal 2005, net income attributed to Office Products
increased 75.6% and 148.1%, respectively, when compared to the same periods last
year. Net income from the Sporting Goods business is slightly lower than the
same periods last year as a direct result of slightly lower sales volumes. The
Company anticipates that the net income from Sporting Goods in 2005 will be flat
or slightly better than 2004. The net income from Office Products for 2005 is
anticipated to be significantly better than 2004 - consistent with the
profitability experienced in the first half of 2005.

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             Six Months
                                           ---------------------------------------------
                                              2005        2004        2005        2004
     -----------------------------------------------------------------------------------
<S>                                           <C>         <C>         <C>         <C>
     Net revenue                              100.0%      100.0%      100.0%      100.0%
     Cost of products sold                     68.0%       70.7%       68.8%       71.5%
                                           --------    --------    --------    --------
     Gross margin                              32.0%       29.3%       31.2%       28.5%
     Selling, administrative and
     general expenses                          23.8%       23.0        23.9%       22.9
                                           --------    --------    --------    --------
     Operating income                           8.2%        6.3%        7.3%        5.6%
</TABLE>

Consolidated Revenue and Gross Margin

Revenues for the second quarter and first half of fiscal 2005 declined 9.5% and
10.3%, respectively, compared to the same periods in 2004. Approximately 75% of
the overall decline is related to the Office Products segment.

Sporting Goods sales in the second quarter and first half of fiscal 2005 were
down 3.7% and 4.8%, respectively, compared to the same periods last year. The
primary factor behind the decline is lower sales to the Company's largest
customer: SEARS. Approximately half of the decline results from SEARS
discontinuing the sale of an arcade style gaming product first sold by SEARS in
2004. In fiscal 2004 this product represented approximately $7 million in sales
to SEARS. The remaining balance of the sales decline is attributed to an
aggressive inventory control and pricing adjustment program initiated by SEARS.
Under this program SEARS has increased retail pricing on certain products. The
Company believes this has and will result in a lower sales volume for those
products. The long-term impact of the SEARS - KMart merger has yet to be
determined, but in the current year the Company anticipates sales to SEARS to be
down $14 million to $18 million compared

                                       9
<PAGE>

to last year. The decline in sales to SEARS will be partially offset by gains in
other customers and the addition of residential playground system sales related
to the Child Life acquisition in the first quarter of 2005. The Company
anticipates total sales for the Sporting Goods segment in 2005 will be down
somewhat compared to last year.

Office Products sales were down 17.0% in the second quarter and down 16.1% in
the first half of fiscal 2005 compared with the same periods last year.
Approximately half of the decline is attributed to the planned elimination of
non-core, low margin products. These products were primarily sold in Europe and
are not manufactured by the Company. Anticipated excess inventories related to
these products were fully reserved for at the end of fiscal 2004. The remainder
of the decline is attributed to discontinued sales to two retail customers in
Europe where the Company could not negotiate a profitable sales agreement and
the loss of approximately $2 million in sales due to a disruption in the first
quarter of shredder product manufactured in China. Management anticipates that
efforts to reverse this sales decline will not be fully realized until 2006.
Consequently the Company anticipates Office Product sales for 2005 to be down
significantly compared to the prior year.

The consolidated gross margin ratio increased during the second quarter to 32.0%
compared to 29.3% in the prior year as a direct result of cost reduction
initiatives and changes in product mix in the Office Products business segment.
This has resulted in an improved gross margin ratio for the first half of fiscal
2005; 31.2% compared to 28.5% in the same period last year. Management
anticipates this trend to continue throughout the remainder of 2005.

Rising oil prices have a direct impact on raw material prices for steel and
resin. To the extent that these costs cannot be passed on to customers through
price increases, the gross margins in both business segments will be negatively
impacted. At present it is not possible to quantify the extent or impact on
future gross margins.

Consolidated Selling, General and Administrative Expenses

Consolidated selling, general and administrative expenses increased slightly as
a percentage of net sales but declined 6% in total during the second quarter and
the first half of fiscal 2005 compared to last year. This reflects cost
reductions related to lower sales volumes and continued efforts to reduce
overhead costs in each business segment. The Company believes that additional
cost reduction synergies are possible as European distribution in the Office
Products business is consolidated. However, these cost reductions will come at a
much slower pace than those already achieved and are not expected to materialize
until 2006.

Financial Condition and Liquidity

The strong financial condition of the company remains relatively unchanged. The
current ratio, a basic measure of liquidity (current assets divided by current
liabilities), was 2.7 as of July 9, 2005 compared to 1.9 as of July 10, 2004 and
1.8 as of December 25, 2004. The increased current ratio is primarily due to the
conversion during the first quarter of fiscal 2005 of approximately $10 million
from short-term debt to long-term debt.

The following schedule summarizes the Company's total debt:

                                             July 9,   July 10,   December
     In thousands                             2005       2004     25, 2004
     ----------------------------------------------------------------------
     Notes payable short-term               $  1,658   $ 12,228   $ 11,638
     Current portion long-term debt              946        354        354
     Long term debt                           27,030     26,470     15,896
                                            --------   --------   --------
     Total debt                             $ 29,634   $ 39,052   $ 27,888
                                            ========   ========   ========

Total debt at July 9, 2005 increased slightly from the total at December 25,
2004 and is in line with Company expectations and historical trends. However,
total debt at July 9, 2005 is significantly lower than the total at July 10,
2004 reflecting the strong cash flow from operations. As a percentage of
stockholders'

                                       10
<PAGE>

equity, total debt has decreased from 63% at July 10, 2004, to 44% at July 9,
2005.

During the first half of 2005, operations generated $4.9 million in cash
compared to $0.8 million for the same time period in 2004. The primary reason
for the increase is lower inventory levels in 2005 compared to 2004.

Total cash used by investing activities during the first half of 2005 totaled
$4.0 million of which approximately $3.2 million was expended to acquire certain
assets of Child Life, a manufacturer of premium residential play systems.
Year-to-date expenditures for property and equipment during the first half of
2005 were roughly equal to the amount expended in 2004. However, the Company has
initiated plans to add a new manufacturing plant in Reynosa, Mexico which is
expected to be operational at the end of the first quarter in 2006. To
accomplish this the Company has executed a sales agreement to acquire the
necessary land at a cost of $1.0 million and a construction contract totaling
$4.3 million. The Company anticipates spending an additional $2.0 million for
equipment and machinery to be used in the new facility. The Company has amended
its credit facilities to facilitate this project.

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 2004. 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 six months ended July 9, 2005.

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 has entered an interest
rate swap agreement. This agreement 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 July 9, 2005 the aggregate fair
value of long-term marketable equity securities was $1.8 million. Due to the
unpredictable nature of the equity market the Company has not employed any hedge
programs relative to these investments.

                                       11
<PAGE>

ITEM 4.  CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Escalade 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.

Changes in Internal Control over Financial Reporting

Management of the Company has evaluated, with the participation of the Company's
Chief Executive Officer and Chief Financial Officer, changes in the Company's
internal controls over financial reporting (as defined in Rule 13a-15(f) and
15d-15(f) of the Exchange Act) during the second quarter of 2005. In connection
with this evaluation and the evaluation performed in the fourth quarter of 2004,
the Company identified deficiencies in internal controls over financial
reporting relating to the Company's subsidiary in France. The Company continued
remediation efforts begun in the fourth quarter of 2004, to eliminate the
deficiencies identified. This will be accomplished by eliminating the accounting
department in France and transferring those functions to the Company's German
subsidiary. As of the end of the period covered by this report, the Company had
not fully completed these actions and remediation efforts are ongoing.

Other than the changes identified above, there have been no changes to the
Company's internal control over financial reporting that occurred since the
beginning of the Company's second quarter of 2005 that have materially affected,
or are reasonably likely to materially affect, the Company's internal control
over financial reporting.
<TABLE>
<CAPTION>

PART II.  OTHER INFORMATION

Item 1. Not Required.

Item 2. (c) ISSUER PURCHASES OF EQUITY SECURITIES.

----------------------------------------------------------------------------------------------------------------------
                                                                                                        (d) Maximum
                                                                                        (c)              Number (or
                                                                                     of Shares          Approximate
                                                                                     (or Units)       Dollar Value) of
                                              (a) Total                              Purchased        Shares (or Units)
                                                Number               (b)              as Part          that May Yet Be
                                              of Shares         Average Price        of Publicy        Purchased Under
                                              (or Units)       Paid per Share      Announced Plans      the Plans or
Period                                        Purchased           (or Unit)          or Programs         or Programs
--------------------------------------     ---------------     ---------------     ---------------     ---------------
<S>                                                <C>         <C>                         <C>         <C>
Shares purchases prior to
 03/19/2005 under the
 current repurchase
 program                                           286,610     $          7.55             286,610     $     3,000,000
--------------------------------------     ---------------     ---------------     ---------------     ---------------

Second quarter purchases:
--------------------------------------     ---------------     ---------------     ---------------     ---------------
03/20/2005 - 04/16/2005                               None                None                None                None
--------------------------------------     ---------------     ---------------     ---------------     ---------------
04/17/2005 - 05/14/2005                             43,000               12.90              43,000             554,780
--------------------------------------     ---------------     ---------------     ---------------     ---------------
05/15/2005 - 06/11/2005                               None                None                None                None
--------------------------------------     ---------------     ---------------     ---------------     ---------------
06/12/2005 - 07/09/2005                               None                None                None                None
--------------------------------------     ---------------     ---------------     ---------------     ---------------
Total share purchases under
 the current program                               326,610     $          8.25             326,610     $     2,445,220
--------------------------------------     ---------------     ---------------     ---------------     ---------------
</TABLE>

The Company has one stock repurchase program which was established in February
2003 by the Board of Directors and which authorized management 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 termination date. There have
been no share repurchases that were not part of a publicly announced program. In
February 2005, the Board of Directors increased the remaining amount on this
plan to its original level of $3,000,000.

Item 3 and 4 Not Required.

Item 5. Other Matters

     Entry into a Material Definitive Agreement

          In June 2005, the company entered into an agreement to acquire land in
          Reynosa, Mexico for the purpose of constructing a manufacturing
          facility. The negotiated price for the land is $968,340.

          In connection with the land purchase agreement noted above, the
          Company entered into a construction contract valued at $4,346,285 to
          construct a facility suitable for the manufacture of certain products
          sold by the Company.

                                       12
<PAGE>

     Entry into a Material Definitive Agreement; Creation of a Direct Financial
     Obligation

          On June 27, 2005 the Company executed an amendment to the existing
          credit agreement between Escalade, Inc. and JPMorgan Chase Bank, N.A.
          The general terms of the agreement were unchanged with the exception
          of the current borrowing limit that was increased to $31 million.

Item 6.  Exhibits and Reports on Form 8-K

     (a)  Exhibits

          Number    Description

          10.1      Promise to enter into a purchase and sale of land agreement
                    between Harvard California, S. de R.L. de C.V. and
                    Dessarrollo Urbano Los Encinos S.A. de C.V.

          10.2      Construction agreement between Harvard California, S. de
                    R.L. de C.V. and Constructora Neuvo Santander de Tamaulipas,
                    S.A. de C.V.

          10.3      Fifth Amendment to Amended and Restated Credit Agreement
                    effective October 24, 2001 by and between Escalade,
                    Incorporated and JPMorgan Chase Bank, NA. The effective date
                    of the Amendment was June 27, 2005.

          10.4      Promissory Note in the amount of $31,000,000 dated June 27,
                    2005 by and between Escalade, Incorporated and JPMorgan
                    Chase Bank, NA.

          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.

                                       13
<PAGE>

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:  July 28, 2005                /s/ C. W. (BILL) REED
       --------------               ----------------------------
                                    C. W. (Bill) Reed
                                    President and Chief Executive Officer



Date:  July 28, 2005                /s/ TERRY D. FRANDSEN
       --------------               ----------------------------
                                    Terry D. Frandsen
                                    Vice President and
                                    Chief Financial Officer

                                       14
</TEXT>
</DOCUMENT>
