EXHIBIT 10.1

Second Amendment To Amended and Restated Credit Agreement

By And Among

Escalade, Incorporated

And

Indian Industries, Inc.

And

The Other Loan Parties Hereto

And

The Lenders Party Hereto

And

JPMorgan Chase Bank, N.A.,
As Administrative Agent

Dated As Of October 26, 2022

Second Amendment To Amended and Restated

Credit Agreement

This Second Amendment To Amended and Restated Credit Agreement (this “Second Amendment”) is made as of October 26, 2022, by and among Escalade, Incorporated, Indian Industries, Inc., the Other Loan Parties hereto, the Lenders party hereto and JPMorgan Chase Bank, N.A., as administrative agent (in such capacity, the “Administrative Agent”). The parties hereto agree as follows:

W I T N E S S E T H:

Whereas, as of January 21, 2022, the parties hereto entered into a certain Amended and Restated Credit Agreement (as amended, the “Agreement”); and

Whereas, the parties desire to amend the Agreement to, among other things, increase the Revolving Commitment and to amend certain definitions and covenants, subject to and as provided in this Second Amendment;

Now, Therefore, in consideration of the premises, and the mutual promises herein contained, the parties agree that the Agreement shall be, and it hereby is, amended as provided herein and the parties further agree as follows:

Article I

Definitions

Section 1.01 Defined Terms. Section 1.01 of the Agreement is hereby amended by substituting the following definitions in lieu of the like existing definitions:

“Applicable Rate” means, for any day, with respect to any Loan, or with respect to the commitment fees payable hereunder, as the case may be, the applicable rate per annum set forth below under the caption “Revolving Commitment ABR Spread”, “Revolving Commitment Term Benchmark Spread”, “Letter of Credit Fee”, or “Commitment Fee Rate”, as the case may be, based upon the Company’s Funded Debt to EBITDA Ratio as of the most recent determination date; provided, that commencing on the Second Amendment Effective Date up to and including the Fiscal Quarter ending June 30, 2023, the “Applicable Rate” shall be the applicable rates per annum set forth below in Category 1:

For purposes of the foregoing, (a) the Applicable Rate shall be determined as of the end of each Fiscal Quarter of the Company, based upon the Company’s annual or quarterly consolidated financial statements delivered pursuant to Section 5.01 and (b) each change in the Applicable Rate resulting from a change in the Funded Debt to EBITDA Ratio shall be effective during the period commencing on and including the date of delivery to the Administrative Agent of such consolidated financial statements indicating such change and ending on the date immediately preceding the effective date of the next such change; provided, that at the option of the Administrative Agent or at the request of the Required Lenders, if the Borrowers fail to deliver the annual or quarterly consolidated financial statements required to be delivered by it pursuant to Section 5.01, the Funded Debt to EBITDA Ratio shall be deemed to be in Category 1 during the period from the expiration of the time for delivery thereof until such consolidated financial statements are delivered.

If at any time the Administrative Agent determines that the financial statements upon which the Applicable Rate was determined were incorrect (whether based on a restatement, fraud or otherwise), or any ratio or compliance information in a Compliance Certificate or other certification was incorrectly calculated, relied on incorrect information or was otherwise not accurate, true or correct, the Borrowers shall be required to retroactively pay any additional amount that the Borrowers would have been required to pay if such financial statements, Compliance Certificate or other information had been accurate and/or computed correctly at the time they were delivered.

“EBITDA” means, for any period, Net Income for such period plus (a) without duplication and to the extent deducted in determining Net Income for such period, the sum of (i) Interest Expense for such period, (ii) income tax expense for such period, (iii) all amounts attributable to depreciation and amortization expense for such period, (iv) any extraordinary non-cash charges for such period and (v) any other non-cash charges for such period (but excluding any non-cash charge in respect of an item that was included in Net Income in a prior period and any non-cash charge that relates to the write-down or write-off of inventory), minus (b) without duplication and to the extent included in Net Income, (i) any cash payments made during such period in respect of non-cash charges described in clause (a)(v) taken in a prior period, (ii) any extraordinary gains and any non-cash items of income for such period, (iii) any non-recurring fees, cash charges and other cash expenses (including severance costs) made or incurred during such period in connection with dispositions permitted hereunder; provided that the aggregate amount added back to EBITDA pursuant to this clause (iii) during the term of this Agreement shall not exceed $2,000,000, and (iv) any unusual or non-recurring charges for such period that are reasonably acceptable to the Administrative Agent and incurred on or prior to December 31, 2023 (but excluding any non-cash charge in respect of an item that was included in Net Income in a prior period); provided that, if any such non-cash charges represent an accrual or reserve for potential cash items in any future period, (A) the Company and its Subsidiaries may determine not to add back such non-cash charges in the current period and (B) to the extent the Company and its Subsidiaries do decide to add back such non-cash charges, the cash payment in respect thereof in such future period shall be subtracted from EBITDA to such extent; provided further that the aggregate amount added-back to EBITDA pursuant to this clause (iv) during the term of this Agreement shall not exceed $2,000,000, all calculated for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

“Revolving Commitment” means, with respect to each Lender, the amount set forth on the Commitment Schedule opposite such Lender’s name, or in the Assignment and Assumption or other documentation or record (as such term is defined in Section 9-102(a)(70) of the New York Uniform Commercial Code) as provided in Section 9.04(b)(ii)(C), pursuant to which such Lender shall have assumed its Revolving Commitment, as applicable, as such Revolving Commitment may be reduced or increased from time to time pursuant to assignments by or to such Lender pursuant to Section 9.04; provided, that at no time shall the Revolving Exposure of any Lender exceed its Revolving Commitment. As of the Second Amendment Effective Date, the aggregate amount of the Lenders’ Revolving Commitments is $90,000,000.

Section 1.01 Defined Terms. Section 1.01 of the Agreement is hereby further amended by adding the following new definition to the Agreement:

“Second Amendment Effective Date” means October 26, 2022.

Article VI

Negative Covenants

SECTION 6.12 Financial Covenants. Section 6.12 of the Agreement is hereby amended by substituting the following new clause (b) in lieu of the like existing clause (b):

(b)         Funded Debt to EBITDA Ratio. The Loan Parties shall achieve a Funded Debt to EBITDA Ratio of not more than (i) 3.25 to 1.00 as of the Fiscal Quarters ending October 1, 2022 and December 31, 2022, (ii) 3.00 to 1.00 as of the Fiscal Quarter ending March 31, 2023, and (iii) 2.75 to 1.00 as of the Fiscal Quarter ending June 30, 2023 and as of the end of each Fiscal Quarter thereafter, calculated as of the 12-month period then ended.

Part II. Continuing Effect

Except as expressly modified herein:

(a)         All terms, conditions, representations, warranties and covenants contained in the Agreement shall remain the same and shall continue in full force and effect, interpreted, wherever possible, in a manner consistent with this Second Amendment; provided, however, in the event of any irreconcilable inconsistency, this Second Amendment shall control;

(b)         The representations and warranties contained in the Agreement shall survive this Second Amendment in their original form as continuing representations and warranties of Borrowers; and

(c)         Capitalized terms used in this Second Amendment, and not specifically herein defined, shall have the meanings ascribed to them in the Agreement.

In consideration hereof, each Borrower represents, warrants, covenants and agrees that:

(aa)      Each representation and warranty set forth in the Agreement, as hereby amended, remains true and correct as of the date hereof in all material respects, except to the extent that such representation and warranty is expressly intended to apply solely to an earlier date and except changes reflecting transactions permitted by the Agreement;

(bb)       There currently exist no offsets, counterclaims or defenses to the performance of the Obligations (such offsets, counterclaims or defenses, if any, being hereby expressly waived);

(cc)       Except as expressly waived in this Second Amendment, there does not exist any Default or Event of Default; and

(dd)       After giving effect to this Second Amendment and any transactions contemplated hereby, no Default or Event of Default is or will be occasioned hereby or thereby.

Part III. Independent Credit Decision

Each Lender acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender, based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Second Amendment.

Part IV. Commitment Schedule

Subject to Part V hereof, the Agreement is hereby amended by substituting the Commitment Schedule attached hereto in lieu of the Commitment Schedule attached to the Agreement.

Part V. Conditions Precedent

Notwithstanding anything contained in this Second Amendment to the contrary, this Second Amendment shall not become effective until each of the following conditions precedent have been fulfilled to the satisfaction of the Administrative Agent:

(a)         The Administrative Agent shall have received counterparts of this Second Amendment, duly executed by the Administrative Agent, Borrowers, the Loan Guarantors and the Lenders;

(b)         The Administrative Agent shall have received a Replacement Revolving Note, duly executed by Borrowers;

(c)         The Administrative Agent shall have received a Consent and Reaffirmation, duly executed by Guarantors;

(d)        The Administrative Agent shall have received a duly executed certificate of the Secretary of each Borrower and Guarantor (A) certifying as to the authorizing resolutions of such Borrower and Guarantor, and (B) certifying as complete and correct as to attached copies of its Articles of Incorporation and By‑Laws or Articles of Organization and Operating Agreement, as applicable, or certifying that such Articles of Incorporation or By‑Laws or Articles of Organization or Operating Agreement, as applicable, have not been amended (except as shown) since the previous delivery thereof to the Administrative Agent;

(e)         The Administrative Agent shall have received such documentation and other information requested in connection with applicable “know your customer” and anti-money laundering rules and regulations, including the USA Patriot Act; and

(f)         All legal matters incident to this Second Amendment shall be reasonably satisfactory to the Administrative Agent and its counsel.

Part V. Expenses

The Borrowers agree to pay or reimburse the Administrative Agent for all reasonable expenses of the Administrative Agent (including, without limitation, reasonable attorneys’ fees) incurred in connection with this Second Amendment. The Borrowers shall also pay all fees as set forth in that certain Fee Letter dated as of the Second Amendment Effective Date.

Part VI. Counterparts

This Second Amendment may be executed in any number of counterparts, each of which shall be an original, but all of which taken together shall constitute one and the same agreement. Delivery of an executed counterpart of this Second Amendment by telefacsimile or other electronic method of transmission shall have the same force and delivery of an original executed counterpart of this Second Amendment. Any party delivering an executed counterpart of this Second Amendment by telefacsimile or other electronic method of transmission shall also deliver an original executed counterpart of this Second Amendment, but the failure to do so shall not affect the validity, enforceability, and binding effect of this Second Amendment.

In Witness Whereof, the parties hereto have caused this Second Amendment to be executed by their respective officers duly authorized as of the date first above written.

[This Space Intentionally Left Blank]

Signature Page Of

Escalade, Incorporated

To Second Amendment to Amended and Restated Credit Agreement

Signature Page Of

Indian Industries, Inc.

To Second Amendment to Amended and Restated Credit Agreement

CONSENT AND REAFFIRMATION

Each of the undersigned Loan Guarantors hereby consents to the foregoing Second Amendment, and further agrees that the execution and delivery of such Second Amendment shall in no way affect, impair, discharge, relieve or release the obligations of the undersigned under its Loan Guaranty, which obligations are hereby ratified, confirmed and reaffirmed in all respects and shall continue in full force and effect, until all obligations of the Borrowers to the Lenders, the Issuing Bank and the Administrative Agent are fully, finally and irrevocably paid and performed. Each Loan Guarantor further acknowledges that the failure to consent to any subsequent amendment shall not affect the liability of such Loan Guarantor under its Loan Guaranty. Capitalized terms used herein and not defined have the meanings ascribed thereto in the Agreement.

Signature Page Of

JPMorgan Chase Bank, N.A.

To Second Amendment to Amended and Restated Credit Agreement

Signature Page Of

Old National Bank

To Second Amendment to Amended and Restated Credit Agreement

COMMITMENT SCHEDULE

*The Swingline Commitment is part of JPMorgan Chase Bank, N.A.’s Revolving Commitment.

EXHIBIT 99.1

Escalade Reports Third Quarter and Year to Date 2022 Results

EVANSVILLE, IN, October 27, 2022 – Escalade, Inc. (NASDAQ: ESCA, or the “Company”), a leading manufacturer and distributor of sporting goods and indoor/outdoor recreational equipment, today announced third quarter and year to date results for 2022.

THIRD QUARTER 2022

(As compared to the third quarter 2021)

NINE MONTHS ENDED OCTOBER 1, 2022

(As compared to the first nine months of 2021)

For the three months ended October 1, 2022, Escalade reported net income of $3.0 million, or $0.22 per diluted share, including $0.06 per diluted share of non-recurring expense.

Sales declined due to softening consumer demand and excess inventories in the retail channel. During the third quarter, increases in billiards and pickleball sales, together with contribution from the Brunswick Billiards® acquisition completed January 21, 2022 were more than offset by lower sales in outdoor categories including archery, games, water sports, and playground.

The Company reported gross margin of 18.2%, a decline of 432 basis points compared with the prior-year period, due to lower sales, unfavorable product mix, global supply chain constraints, and nonrecurring product recall expenses.

Selling, general, and administrative expense as percentage of net sales decreased to 11.7% in the third quarter 2022, versus 12.5% in the prior-year period, due to the Company’s expense mitigation efforts.

Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) declined 35.3% to $5.8 million in the third quarter 2022, versus $9.0 million in the prior-year period. For the nine months year-to-date EBITDA decreased 9.7% to $26.7 million vs $29.5 million in 2021.

As of October 1, 2022, the Company had total cash and equivalents of $4.0 million, together with $10.0 million of availability on its senior secured revolving credit facility maturing in 2027. At the end of the third quarter 2022, net debt (total debt less cash) was 3.0x trailing twelve-month EBITDA.

Escalade announced a quarterly dividend of $0.15 per share to be paid to all shareholders of record on December 5, 2022 and disbursed on December 12, 2022.

Effective January 1, 2023, Escalade will transition to a conventional twelve-month reporting calendar. The fourth quarter 2022 will end on December 31, 2022, then the Company will transition to its new financial reporting calendar for 2023.

MANAGEMENT COMMENTARY

“Broad-based inflationary pressures and a rising interest rate environment adversely impacted consumer discretionary spending behaviors during the third quarter, resulting in a year-over-year decline in sales and profitability during the period,” stated Walter P. Glazer, Jr., President and CEO of Escalade. “During a transitional period for the consumer, we believe the strength of our brands, diverse sourcing capabilities, onshore manufacturing presence and disciplined expense management will position us to successfully navigate a challenging near-term macroeconomic backdrop.”

“Third quarter sales declined year-over-year due to softness in most outdoor categories, including archery, partially offset by continued strength in pickleball and billiards,” continued Glazer. “Elevated freight and logistics expenses more than offset some lower material costs in the third quarter, contributing to a year-over-year decline in gross profit in the period. While ocean freight rates and turnaround have begun to improve, inland freight has become challenging due to domestic labor and equipment shortages.”

“In recent months, several large retail customers have slowed their pace of purchasing to reduce their overall inventories, contributing to the elevated inventory levels we are holding,” continued Glazer. “During the next six months, we expect that a combination of seasonal demand, together with increased promotional activity, will contribute to a decline in inventories throughout the entire system. We believe this inventory decline will reduce our carrying costs and improve asset utilization to more acceptable levels.”

"While we are not satisfied with the 2022 year to date results, we are taking steps to right size our cost structure and asset base to weather the economic headwinds and position our Company for continued growth in the years ahead,” continued Glazer.

“Subsequent to the quarter end, we exercised a $15 million accordion provision under our senior revolving credit facility,” continued Glazer. “Including this additional availability, we now have nearly $30 million of liquidity to support the ongoing growth of our business. As our inventory levels normalize over the coming months, we anticipate free cash conversion will also improve, further bolstering our liquidity.”

“Our capital allocation priorities remain unchanged,” continued Glazer. “We remain committed to a reduction in net leverage to a range of 1.5x-2.0x trailing-twelve-month EBITDA, while maintaining a consistent quarterly cash dividend. As before, we will continue to selectively invest internally in higher-growth categories that cater to a durable base of loyal customers who value our portfolio of premium indoor/outdoor brands. Looking forward, we also believe an economic downturn may create additional market share opportunities for the Company.”

CONFERENCE CALL

A conference call will be held Thursday, October 27, 2022, at 11:00 a.m. ET to review the Company’s financial results, discuss recent events and conduct a question-and-answer session.

A webcast of the conference call and accompanying presentation materials will be available in the Investor Relations section of Escalade’s website at www.escaladeinc.com. To listen to a live broadcast, go to the site at least 15 minutes prior to the scheduled start time in order to register, download, and install any necessary audio software.

To participate in the live teleconference:

To listen to a replay of the teleconference, which subsequently will be available through November 10, 2022:

USE OF NON-GAAP FINANCIAL MEASURES

In addition to disclosing financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”), this release contains the non-GAAP financial measure known as “EBITDA.” A reconciliation of this non-GAAP financial measure is contained at the end of this press release. EBITDA is a non-GAAP financial measure that Escalade uses to facilitate comparisons of operating performance across periods. Escalade believes the disclosure of EBITDA provides useful information to investors regarding its financial condition and results of operations. Non-GAAP measures should be viewed as a supplement to and not a substitute for the Company’s U.S. GAAP measures of performance and the financial results calculated in accordance with U.S. GAAP and reconciliations from these results should be carefully evaluated. Non-GAAP measures have limitations as an analytical tool and should not be considered in isolation or in lieu of an analysis of the Company’s results as reported under U.S. GAAP and should be evaluated only on a supplementary basis.

ABOUT ESCALADE, INC

Founded in 1922, and headquartered in Evansville, Indiana, Escalade designs, manufactures, and sells sporting goods, fitness, and indoor/outdoor recreation equipment.  Our mission is to connect family and friends creating lasting memories. Leaders in our respective categories, Escalade’s brands include Brunswick Billiards®; STIGA® table tennis; Accudart®; RAVE Sports® water recreation; Victory Tailgate® custom games; Onix® pickleball; Goalrilla™ basketball; Lifeline® fitness; Woodplay® playsets; and Bear® Archery. Escalade’s products are available online and at leading retailers nationwide. For more information about Escalade’s many brands, history, financials, and governance please visit www.escaladeinc.com.

INVESTOR RELATIONS CONTACT

Patrick Griffin

Vice President - Corporate Development & Investor Relations This report contains forward-looking statements relating to present or future trends or factors that are subject to risks and uncertainties.

812-467-1358

FORWARD-LOOKING STATEMENTS 

These risks include, but are not limited to: specific and overall impacts of the COVID-19 global pandemic on Escalade’s financial condition and results of operations; the impact of competitive products and pricing; product demand and market acceptance; new product development; Escalade’s ability to achieve its business objectives, especially with respect to its Sporting Goods business on which it has chosen to focus; Escalade’s ability to successfully achieve the anticipated results of strategic transactions, including the integration of the operations of acquired assets and businesses and of divestitures or discontinuances of certain operations, assets, brands, and products; the continuation and development of key customer, supplier, licensing and other business relationships; Escalade’s ability to develop and implement our own direct to consumer e-commerce distribution channel; Escalade’s ability to successfully negotiate the shifting retail environment and changes in consumer buying habits; the financial health of our customers; disruptions or delays in our business operations, including without limitation disruptions or delays in our supply chain, arising from political unrest, war, labor strikes, natural disasters, public health crises such as the coronavirus pandemic, and other events and circumstances beyond our control; Escalade’s ability to control costs; Escalade’s ability to successfully implement actions to lessen the potential impacts of tariffs and other trade restrictions applicable to our products and raw materials, including impacts on the costs of producing our goods, importing products and materials into our markets for sale, and on the pricing of our products; general economic conditions; fluctuation in operating results; changes in foreign currency exchange rates; changes in the securities markets; continued listing of the Company’s common stock on the NASDAQ Global Market; the Company’s inclusion or exclusion from certain market indices; Escalade’s ability to obtain financing and to maintain compliance with the terms of such financing; the availability, integration and effective operation of information systems and other technology, and the potential interruption of such systems or technology; the potential impact of actual or perceived defects in, or safety of, our products, including any impact of product recalls or legal or regulatory claims, proceedings or investigations involving our products; risks related to data security of privacy breaches; 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.

Escalade, Incorporated and Subsidiaries

Consolidated Statements of Operations

(Unaudited, In Thousands Except Per Share Data)

Consolidated Balance Sheets

(Unaudited, In Thousands)

Reconciliation of GAAP Net Income to Non-GAAP EBITDA

(Unaudited, In Thousands)