SECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549

Form 10-Q

|                                          |                                                                                           
|----------------------------------------- | ------------------------------------------------------------------------------------------
|x                                         | Quarterly report pursuant
  to Section 13 OR 15 (d) of the Securities Exchange Act of 1934
|                                          |                                                                                           
|For
  the quarter ended March 21, 2009 or
|                                          |                                                                                           
|o                                         | Transition report pursuant
  to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _____ to _____

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)
|                                        |               
|817 Maxwell Ave, Evansville, Indiana    | 47711         
|(Address of principal executive office) | (Zip Code)    

812-467-4449(Registrants
Telephone Number)

Securities registered pursuant to Section 12(b) of the Act

|                             |                                         
|---------------------------- | ----------------------------------------
|Common
  Stock, No Par Value | The
  NASDAQ Stock Market LLC           
|(Title
  of Class)           | (Name
  of Exchange on Which Registered)

Securities registered pursuant to section 12(g) of the Act: NONE

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 o


Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, or a smaller reporting
company. See definition of accelerated filer, large accelerated filer and
smaller reporting company in Rule 12b-2 of the Exchange Act.

|                                                                         |                            
|------------------------------------------------------------------------ | ---------------------------
|Large accelerated filer o                                                | Accelerated filer o        
|Non-accelerated filer o 
  (do not check if a smaller reporting company) | Smaller reporting company x

Indicate by checkmark whether the registrant is a shell company (as defined
in Rule 12 b-2 of the Exchange Act).


Yes o No x


Indicate the number of
shares outstanding of each of the issuers classes of common stock, as of the
latest practicable date.

|                     |  |                                
|-------------------- |  | -------------------------------
|Class                |  | Outstanding
  at April 14, 2009
|                     |  |                                
|Common, no par value |  | 12,616,042                     

---



INDEX

|          |                                                                                                                          |         
|--------- | ------------------------------------------------------------------------------------------------------------------------ | --------
|          |                                                                                                                          | Page No.
|Part I.   | Financial
  Information:                                                                                                 |         
|          |                                                                                                                          |         
|Item 1 -  | Financial
  Statements:                                                                                                  |         
|          |                                                                                                                          |         
|          | Consolidated
  Condensed Balance Sheets as of March 21, 2009, March 22, 2008, and December
  27, 2008                    | 3       
|          |                                                                                                                          |         
|          | Consolidated
  Condensed Statements of Operations for the Three Months Ended March 21, 2009
  and March 22, 2008         | 4       
|          |                                                                                                                          |         
|          | Consolidated
  Condensed Statements of Comprehensive Loss for the Three Months Ended March
  21, 2009 and March 22, 2008 | 4       
|          |                                                                                                                          |         
|          | Consolidated
  Condensed Statements of Cash Flows for the Three Months Ended March 21, 2009
  and March 22, 2008         | 5       
|          |                                                                                                                          |         
|          | Notes to
  Consolidated Condensed Financial Statements                                                                   | 6       
|          |                                                                                                                          |         
|Item 2 -  | Managements
  Discussion and Analysis of Financial Condition and Results of Operations                                  | 10      
|          |                                                                                                                          |         
|Item 3 -  | Quantitative
  and Qualitative Disclosures about Market Risk                                                             | 13      
|          |                                                                                                                          |         
|Item 4T - | Controls
  and Procedures                                                                                                | 14      
|          |                                                                                                                          |         
|Part II.  | Other
  Information                                                                                                      |         
|          |                                                                                                                          |         
|Item 2 -  | Issuer
  Purchases of Equity Securities                                                                                  | 15      
|          |                                                                                                                          |         
|Item 4 -  | Submission
  of Matters to a Vote of Security Holders                                                                    |         
|          |                                                                                                                          |         
|Item 6 -  | Exhibits                                                                                                                 | 15      
|          |                                                                                                                          |         
|          | Signatures                                                                                                               | 16      

2

---



PART I. FINANCIAL INFORMATION

|        |                       
|------- | ----------------------
|Item 1. | FINANCIAL
  STATEMENTS

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

|                                                                                                                                     |  |                                 |         |                                 |   |                           |  |   |         | 
|------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------------------- | ------- | ------------------------------- | - | ------------------------- |  | - | ------- | 
|                                                                                                                                     |  | March
  21, 
  2009 (Unaudited) |         | March
  22, 
  2008 (Unaudited) |   | December 27,2008(Audited) | 
|ASSETS                                                                                                                               |  |                                 |         |                                 |   |                           |  |   |         | 
|Current Assets:                                                                                                                      |  |                                 |         |                                 |   |                           |  |   |         | 
|Cash and cash equivalents                                                                                                            |  | $                               | 4,562   |                                 | $ | 3,693                     |  | $ | 3,617   | 
|Receivables, less allowance of $1,275; $1,023; and
$1,114;
  respectively                                                            |  |                                 | 22,915  |                                 |   | 23,781                    |  |   | 27,178  | 
|Inventories                                                                                                                          |  |                                 | 31,010  |                                 |   | 37,991                    |  |   | 29,860  | 
|Prepaid expenses                                                                                                                     |  |                                 | 1,461   |                                 |   | 2,797                     |  |   | 1,254   | 
|Assets held for sale                                                                                                                 |  |                                 | 3,325   |                                 |   |                           |  |   | 3,325   | 
|Deferred income tax benefit                                                                                                          |  |                                 | 2,060   |                                 |   | 1,611                     |  |   | 2,015   | 
|Income tax receivable                                                                                                                |  |                                 | 5,155   |                                 |   | 1,831                     |  |   | 5,327   | 
|                                                                                                                                     |  |                                 |         |                                 |   |                           |  |   |         | 
|TOTAL CURRENT ASSETS                                                                                                                 |  |                                 | 70,488  |                                 |   | 71,704                    |  |   | 72,576  | 
|                                                                                                                                     |  |                                 |         |                                 |   |                           |  |   |         | 
|Property, plant and equipment, net                                                                                                   |  |                                 | 20,409  |                                 |   | 22,200                    |  |   | 20,209  | 
|Intangible assets                                                                                                                    |  |                                 | 18,591  |                                 |   | 20,633                    |  |   | 19,153  | 
|Goodwill                                                                                                                             |  |                                 | 25,543  |                                 |   | 26,281                    |  |   | 25,811  | 
|Investments                                                                                                                          |  |                                 | 8,897   |                                 |   | 12,165                    |  |   | 8,129   | 
|Interest rate swap                                                                                                                   |  |                                 |        |                                 |   | 27                        |  |   |        | 
|Deferred income tax benefit                                                                                                          |  |                                 | 723     |                                 |   |                          |  |   | 723     | 
|Other assets                                                                                                                         |  |                                 | 952     |                                 |   | 1,764                     |  |   | 1,100   | 
|                                                                                                                                     |  |                                 |         |                                 |   |                           |  |   |         | 
|                                                                                                                                     |  | $                               | 145,603 |                                 | $ | 154,774                   |  | $ | 147,701 | 
|                                                                                                                                     |  |                                 |         |                                 |   |                           |  |   |         | 
|                                                                                                                                     |  |                                 |         |                                 |   |                           |  |   |         | 
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                 |  |                                 |         |                                 |   |                           |  |   |         | 
|Current Liabilities:                                                                                                                 |  |                                 |         |                                 |   |                           |  |   |         | 
|Notes payable                                                                                                                        |  | $                               |        |                                 | $ | 11,764                    |  | $ | 46,525  | 
|Trade accounts payable                                                                                                               |  |                                 | 3,144   |                                 |   | 3,078                     |  |   | 3,272   | 
|Accrued liabilities                                                                                                                  |  |                                 | 15,251  |                                 |   | 20,389                    |  |   | 16,698  | 
|Income tax payable                                                                                                                   |  |                                 | 992     |                                 |   |                          |  |   | 1,239   | 
|                                                                                                                                     |  |                                 |         |                                 |   |                           |  |   |         | 
|TOTAL CURRENT LIABILITIES                                                                                                            |  |                                 | 19,387  |                                 |   | 35,231                    |  |   | 67,734  | 
|                                                                                                                                     |  |                                 |         |                                 |   |                           |  |   |         | 
|Other Liabilities:                                                                                                                   |  |                                 |         |                                 |   |                           |  |   |         | 
|Long-term debt                                                                                                                       |  |                                 | 46,244  |                                 |   | 29,029                    |  |   |        | 
|Other non-current income tax liability                                                                                               |  |                                 |        |                                 |   | 118                       |  |   |        | 
|Deferred income tax liability                                                                                                        |  |                                 |        |                                 |   | 589                       |  |   |        | 
|Deferred compensation                                                                                                                |  |                                 | 1,203   |                                 |   | 1,099                     |  |   | 1,177   | 
|                                                                                                                                     |  |                                 |         |                                 |   |                           |  |   |         | 
|TOTAL LIABILITIES                                                                                                                    |  |                                 | 66,834  |                                 |   | 66,066                    |  |   | 68,911  | 
|                                                                                                                                    
|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  12,616,042; 12,697,586; and 12,616,042; shares
  respectively |  |                                 | 12,616  |                                 |   | 12,698                    |  |   | 12,616  | 
|Retained earnings                                                                                                                    |  |                                 | 62,726  |                                 |   | 69,481                    |  |   | 63,050  | 
|Accumulated other comprehensive income                                                                                               |  |                                 | 3,427   |                                 |   | 6,529                     |  |   | 3,124   | 
|                                                                                                                                     |  |                                 |         |                                 |   |                           |  |   |         | 
|                                                                                                                                     |  |                                 | 78,769  |                                 |   | 88,708                    |  |   | 78,790  | 
|                                                                                                                                     |  |                                 |         |                                 |   |                           |  |   |         | 
|                                                                                                                                     |  | $                               | 145,603 |                                 | $ | 154,774                   |  | $ | 147,701 | 
|                                                                                                                                     |  |                                 |         |                                 |   |                           |  |   |         | 

See notes to Consolidated
Condensed Financial Statements.

3

---



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

|                                             |  |                      |        |                     |   |        |  
|-------------------------------------------- |  | -------------------- | ------ | ------------------- | - | ------ | -
|                                             |  | Three
  Months Ended |       
|                                             |  |                      |       
|                                             |  | March
  21, 
  2009  |        | March
  22, 
  2008 |  
|                                             |  |                      |        |                     |   |        |  
|Net sales                                    |  | $                    | 24,958 |                     | $ | 29,166 |  
|                                             |  |                      |        |                     |   |        |  
|Costs, expenses and other income:            |  |                      |        |                     |   |        |  
|Cost of products sold                        |  |                      | 17,096 |                     |   | 20,743 |  
|Selling, general and administrative
expenses |  |                      | 8,023  |                     |   | 9,042  |  
|Amortization                                 |  |                      | 467    |                     |   | 437    |  
|                                             |  |                      |        |                     |   |        |  
|Operating loss                               |  |                      | (628   | )                   |   | (1,056 | )
|                                             |  |                      |        |                     |   |        |  
|Interest expense, net                        |  |                      | (242   | )                   |   | (487   | )
|Other income                                 |  |                      | 184    |                     |   | 162    |  
|                                             |  |                      |        |                     |   |        |  
|Loss before income taxes                     |  |                      | (686   | )                   |   | (1,381 | )
|                                             |  |                      |        |                     |   |        |  
|Provision for income tax benefit             |  |                      | 247    |                     |   | 533    |  
|                                             |  |                      |        |                     |   |        |  
|                                             |  |                      |        |                     |   |        |  
|Net loss                                     |  | $                    | (439   | )                   | $ | (848   | )
|                                             |  |                      |        |                     |   |        |  
|                                             |  |                      |        |                     |   |        |  
|Per share data:                              |  |                      |        |                     |   |        |  
|Basic loss per share                         |  | $                    | (0.03  | )                   | $ | (0.07  | )
|Diluted loss per share                       |  | $                    | (0.03  | )                   | $ | (0.07  | )
|Cash dividend paid                           |  | $                    |       |                     | $ | 0.25   |  
|                                             |  |                      |        |                     |   |        |  

CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE LOSS
(UNAUDITED)

|                                                                                                                       |  |   |      |   |   |       |  
|---------------------------------------------------------------------------------------------------------------------- |  | - | ---- | - | - | ----- | -
|Net loss                                                                                                               |  | $ | (439 | ) | $ | (848  | )
|                                                                                                                       |  |   |      |   |   |       |  
|Unrealized loss on marketable equity securities available for sale,
  net of tax benefit of $20 and $218, respectively |  |   | (30  | ) |   | (330  | )
|                                                                                                                       |  |   |      |   |   |       |  
|Foreign currency translation adjustment                                                                                |  |   | 333  |   |   | 1,053 |  
|                                                                                                                       |  |   |      |   |   |       |  
|Unrealized loss on interest rate swap agreement, net of tax of $0 and
  $11, respectively                              |  |   |     |   |   | (17   | )
|                                                                                                                       |  |   |      |   |   |       |  
|                                                                                                                       |  |   |      |   |   |       |  
|Comprehensive loss                                                                                                     |  | $ | (136 | ) | $ | (142  | )
|                                                                                                                       |  |   |      |   |   |       |  

See notes to Consolidated
Condensed Financial Statements.

4

---



ESCALADE, INCORPORATED AND SUBSIDIARIESCONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(All amounts in thousands) (Unaudited)

|                                                                                                |  |                      |        |                  |   |        |  
|----------------------------------------------------------------------------------------------- |  | -------------------- | ------ | ---------------- | - | ------ | -
|                                                                                                |  | Three
  Months Ended |       
|                                                                                                |  |                      |       
|                                                                                                |  | March
  21, 2009     |        | March
  22, 2008 |  
|                                                                                                |  |                      |        |                  |   |        |  
|Operating Activities:                                                                           |  |                      |        |                  |   |        |  
|Net loss                                                                                        |  | $                    | (439   | )                | $ | (848   | )
|Depreciation and amortization                                                                   |  |                      | 1,194  |                  |   | 1,225  |  
|Loss (Gain) on disposal of property and
equipment                                               |  |                      | 13     |                  |   | (8     | )
|Employee stock-based compensation                                                               |  |                      | 115    |                  |   | 153    |  
|Adjustments necessary to reconcile net income
(loss) to net cash used
  by operating activities |  |                      | 1,201  |                  |   | (3,042 | )
|                                                                                                |  |                      |        |                  |   |        |  
|Net cash provided (used) by operating
activities                                                |  |                      | 2,084  |                  |   | (2,520 | )
|                                                                                                |  |                      |        |                  |   |        |  
|                                                                                                |  |                      |        |                  |   |        |  
|Investing Activities:                                                                           |  |                      |        |                  |   |        |  
|Purchase of property and equipment                                                              |  |                      | (1,054 | )                |   | (2,268 | )
|Proceeds from sale of property and
equipment                                                    |  |                      |       |                  |   | 22     |  
|                                                                                                |  |                      |        |                  |   |        |  
|Net cash used by investing activities                                                           |  |                      | (1,054 | )                |   | (2,246 | )
|                                                                                                |  |                      |        |                  |   |        |  
|                                                                                                |  |                      |        |                  |   |        |  
|Financing Activities:                                                                           |  |                      |        |                  |   |        |  
|Net increase (decrease) in notes payable                                                        |  |                      | (281   | )                |   | 8,625  |  
|Proceeds from exercise of stock options                                                         |  |                      |       |                  |   | 313    |  
|Purchase of common stock                                                                        |  |                      |       |                  |   | (195   | )
|Director compensation                                                                           |  |                      |       |                  |   | 11     |  
|Dividends paid                                                                                  |  |                      |       |                  |   | (3,175 | )
|                                                                                                |  |                      |        |                  |   |        |  
|Net cash provided (used) by financing
activities                                                |  |                      | (281   | )                |   | 5,579  |  
|                                                                                                |  |                      |        |                  |   |        |  
|Effect of exchange rate changes on cash                                                         |  |                      | 196    |                  |   | 72     |  
|                                                                                                |  |                      |        |                  |   |        |  
|Net increase in cash and cash equivalents                                                       |  |                      | 945    |                  |   | 885    |  
|Cash and cash equivalents, beginning of period                                                  |  |                      | 3,617  |                  |   | 2,808  |  
|                                                                                                |  |                      |        |                  |   |        |  
|Cash and cash equivalents, end of period                                                        |  | $                    | 4,562  |                  | $ | 3,693  |  
|                                                                                                |  |                      |        |                  |   |        |  

See notes to Consolidated
Condensed Financial Statements.

5

---



ESCALADE, INCORPORATED AND SUBSIDIARIES NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)

|                                                     
|-----------------------------------------------------
|Note A 
  Summary of Significant Accounting Policies
|                                                     

Presentation
of Consolidated Condensed Financial Statements  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 consolidated condensed balance sheet of the
Company as of December 27, 2008 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 consolidated
condensed 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 2008 filed with the Securities and Exchange
Commission.

|                            
|----------------------------
|Note B -
  Reclassifications
|                            

Certain
reclassifications have been made to prior year financial statements to conform
to the current year financial statement presentation. These reclassifications
had no effect on net earnings.

|                           
|---------------------------
|Note C -
  Seasonal Aspects
|                           

The results of
operations for the three-month periods ended March 21, 2009 and March 22, 2008
are not necessarily indicative of the results to be expected for the full year.

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

|                             |  |                   |        |                   |   |                      |  |   |        | 
|---------------------------- |  | ----------------- | ------ | ----------------- | - | -------------------- |  | - | ------ | 
|(All amounts
  in thousands) |  | March 21, 
  2009 |        | March 22, 
  2008 |   | December 27, 
  2008 | 
|                             |  |                   |        |                   |   |                      |  |   |        | 
|Raw materials                |  | $                 | 11,148 |                   | $ | 9,588                |  | $ | 9,540  | 
|Work in progress             |  |                   | 2,599  |                   |   | 6,497                |  |   | 4,506  | 
|Finished goods               |  |                   | 17,263 |                   |   | 21,906               |  |   | 15,814 | 
|                             |  |                   |        |                   |   |                      |  |   |        | 
|                             |  | $                 | 31,010 |                   | $ | 37,991               |  | $ | 29,860 | 
|                             |  |                   |        |                   |   |                      |  |   |        | 

|                        
|------------------------
|Note E 
  Notes Payable
|                        

On April 30,
2009 the Company signed a loan agreement with JP Morgan Chase Bank, N.A.
(Chase) for a senior secured revolving credit facility in the maximum amount up
to $50,000,000 and through Chase London Branch, as senior secured revolving
credit facility in the maximum amount of 3,000,000 Euro upon certain terms and
conditions. The credit facility has a maturity date of May 31, 2010. A portion
of the credit facility not in excess of $3,500,000 is available for the
issuance of commercial or standby letters of credit to be issued by Chase.

6

---



|                       
|-----------------------
|Note F 
  Income Taxes
|                       

The provision
for income taxes was computed based on financial statement income. In accordance
with FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes 
an interpretation of FASB Statement No. 109 (FIN 48), which became effective
for the Company on December 31, 2006, the Company has recorded the following
changes in uncertain tax positions:

|                                         |  |                |     |                |   |     | 
|---------------------------------------- |  | -------------- | --- | -------------- | - | --- | 
|                                         |  | Quarter Ended  |    
|In Thousands                             |  | March 21, 2009 |     | March 22, 2008 |  
|                                         |  |                |     |                |  
|Beginning Balance                        |  | $              | 954 |                | $ | 118 | 
|Additions for current year tax positions |  |                |    |                |   |    | 
|Additions for prior year tax positions   |  |                |    |                |   |    | 
|Settlements                              |  |                |    |                |   |    | 
|Reductions Settlements                   |  |                |    |                |   |    | 
|Reductions for prior year tax positions  |  |                |    |                |   |    | 
|                                         |  |                |     |                |   |     | 
|Ending Balance                           |  | $              | 954 |                | $ | 118 | 
|                                         |  |                |     |                |   |     | 

|                                               
|-----------------------------------------------
|Note G 
  Fair Values of Financial Instruments
|                                               

In September 2006, the
Financial Accounting Standards Board (FASB) issued Statement of Financial
Accounting Standards No. 157, Fair Value Measurements (Statement
No. 157) which defines fair value, establishes a framework for measuring
fair value, and expands disclosures about fair value measurements. This became
effective for the Company on December 30, 2007. The Company holds one type of
financial asset subject to valuation under Statement No. 157: marketable
equity securities available for sale. The Company does not have any liabilities subject to valuation under
Statement 157. Fair values as of March 21, 2009 were calculated as follows:

|                                                  |  |                           |       |                                                                |   |                                               |  |                                           |   |  |   |   | 
|------------------------------------------------- |  | ------------------------- | ----- | -------------------------------------------------------------- | - | --------------------------------------------- |  | ----------------------------------------- | - |  | - | - | 
|(All amounts
  in thousands)                      |  | Balance at March 21, 2009 |       | Quoted Prices in Active Markets for Identical Assets (Level 1) |   | Significant Other Observable Inputs (Level 2) |  | Significant unobservable Inputs (Level 3) |  
|                                                  |  |                           |       |                                                                |   |                                               |  |                                           |  
|Marketable
  equity securities available for sale |  | $                         | 1,161 |                                                                | $ | 1,161                                         |  | $                                         |  |  | $ |  | 
|                                                  |  |                           |       |                                                                |   |                                               |  |                                           |   |  |   |   | 

|                                      
|--------------------------------------
|Note H 
  Employee Stock Compensation
|                                      

The fair value
of stock-based compensation is recognized in accordance with the provisions of
SFAS No. 123R Share-Based Payments (SFAS 123R).

7

---



During the
three months ended March 21, 2009 and pursuant to the 2007 Incentive Plan, in
lieu of director fees, the Company awarded to certain directors 30,592
restricted stock units. No other restricted stock units were awarded. The
restricted stock units awarded to the directors vest after one year following
the grant date. Restricted stock awards are subject to forfeiture if on the
vesting date the employee is not employed or the director no longer holds a
position with the Company.

For the three
months ended March 21, 2009 and March 22, 2008, the Company recognized stock
based compensation expense of $115 thousand and $153 thousand, respectively. At
March 21, 2009 and March 22, 2008, respectively, there was $.7 and $1.7 million
in unrecognized stock-based compensation expense related to non-vested stock
awards.

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

|                                 |  |                                                        |        |                    |   |        |  |       |        |   |   |         |  
|-------------------------------- |  | ------------------------------------------------------ | ------ | ------------------ | - | ------ |  | ----- | ------ | - | - | ------- | -
|                                 |  | As of and for the Three Months 
  Ended March 21, 2009 |       
|                                 |  |                                                        |       
|In thousands                     |  | Sporting 
  Goods                                      |        | Office 
  Products |   | Corp.  |  | Total |       
|                                 |  |                                                        |        |                    |   |        |  |       |       
|                                 |  |                                                        |        |                    |   |        |  |       |        |   |   |         |  
|Revenues from external customers |  | $                                                      | 15,567 |                    | $ | 9,391  |  | $     |       |   | $ | 24,958  |  
|Operating income(loss)           |  |                                                        | 35     |                    |   | 998    |  |       | (1,661 | ) |   | (628    | )
|Net income (loss)                |  |                                                        | (491   | )                  |   | 755    |  |       | (703   | ) |   | (439    | )
|Total assets                     |  | $                                                      | 75,968 |                    | $ | 44,371 |  | $     | 25,264 |   | $ | 145,603 |  

|                                 |  |                                                       |        |                    |   |        |  |       |        |   |   |         |  
|-------------------------------- |  | ----------------------------------------------------- | ------ | ------------------ | - | ------ |  | ----- | ------ | - | - | ------- | -
|                                 |  | As of and for the Three Months
  Ended March 22, 2008 |       
|                                 |  |                                                       |       
|In thousands                     |  | Sporting 
  Goods                                     |        | Office 
  Products |   | Corp.  |  | Total |       
|                                 |  |                                                       |        |                    |   |        |  |       |       
|                                 |  |                                                       |        |                    |   |        |  |       |        |   |   |         |  
|Revenues from external customers |  | $                                                     | 17,533 |                    | $ | 11,633 |  | $     |       |   | $ | 29,166  |  
|Operating income(loss)           |  |                                                       | (1,299 | )                  |   | 1,020  |  |       | (777   | ) |   | (1,056  | )
|Net income (loss)                |  |                                                       | (918   | )                  |   | 587    |  |       | (517   | ) |   | (848    | )
|Total assets                     |  | $                                                     | 86,219 |                    | $ | 47,008 |  | $     | 21,547 |   | $ | 154,774 |  

|                           
|---------------------------
|Note J 
  Dividend Payment
|                           

The Company
has not declared a dividend to be paid in 2009.

|                             
|-----------------------------
|Note K -
  Earnings Per Share
|                             

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

8

---



|                                                                |  |                |        |                |  |        | 
|--------------------------------------------------------------- |  | -------------- | ------ | -------------- |  | ------ | 
|                                                                |  | 3 Months Ended |       
|                                                                |  |                |       
|All amounts
  in thousands                                      |  | March 21, 2009 |        | March 22, 2008 | 
|                                                                |  |                |        |                | 
|                                                                |  |                |        |                |  |        | 
|Weighted average common shares outstanding                      |  |                | 12,616 |                |  | 12,683 | 
|Dilutive effect of stock options                                |  |                | 103    |                |  | 12     | 
|                                                                |  |                |        |                |  |        | 
|Weighted average common shares outstanding,
  assuming dilution |  |                | 12,719 |                |  | 12,695 | 
|                                                                |  |                |        |                |  |        | 

Stock options
that are anti-dilutive as to earnings per share and unvested restricted stock
units which have a market condition for vesting that has not been achieved are
ignored in the computation of dilutive earnings per share. The number of stock
options and restricted stock units that were excluded in 2009 and 2008 were
520,942 and 659,117, respectively.

|                                   
|-----------------------------------
|Note L  New
  Accounting Standards
|                                   

With the
exception of those discussed below, there have been no recent accounting
pronouncements or changes in accounting pronouncements during the three months
ended March 21, 2009, as compared to the recent accounting pronouncements
described in the Companys Annual Report on Form 10-K for the fiscal year ended
December 27, 2008, that are of significance, or potential significance to the
Company.

In April 2009,
the FASB issued FASB Staff Position No. 107-1 (FSP FAS 107-1) and APB 28-1
(APB 28-1), which amends FASB Statement No. 107, Disclosures about Fair
Value of Financial Instruments and APB Opinion NO. 28, Interim Financial
Reporting, to require disclosures about the fair value of financial instruments
for interim reporting periods. FSP FAS 107-1 and APB 28-1 will be effective for
interim reporting periods ending after June 15, 2009. The adoption of this
staff position is not expected to have a material impact on the Companys
financial position or results of operation.

In April 2009,
the FASB issued FASB Staff Position No. 115-2 (FSP FAS 115-2) and FASB
Staff Position No. 124-2 (FSP FAS 124-2), which amends the
other-than-temporary impairment guidance for debt and equity securities. FSP
FAS 115-2 and FSP FAS 124-2 shall be effective for interim and annual reporting
periods ending after June 15, 2009. The Company has not determined the
impact of its adoption of this staff position.

In
April 2009 the FASB issued FSP No. 141R-1 Accounting for Assets
Acquired and Liabilities Assumed in a Business Combination That Arise from
Contingencies, or FSP 141R-1. FSP 141R-1 amends the provisions in Statement
141R for the initial recognition and measurement, subsequent measurement and
accounting, and disclosures for assets and liabilities arising from
contingencies in business combinations. The FSP eliminates the distinction
between contractual and non-contractual contingencies, including the initial
recognition and measurement criteria in Statement 141R and instead carries
forward most of the provisions in SFAS 141 for acquired contingencies. FSP
141R-1 is effective for contingent assets and contingent liabilities acquired
in business combinations for which the acquisition date is on or after the
beginning of the first annual reporting period beginning on or after
December 15, 2008. The adoption of this staff position is not expected to
have a material impact on the Companys financial position or results of
operation.

9

---



In April 2009,
the FASB issued FASB Staff Position No. 157-4 (FSP FAS 157-4), which
provides additional guidance in accordance with FASB No. 157, Fair Value
Measurements, when the volume and level of activity for the asset or liability
has significantly decreased. FSP FAS 157-4 shall be effective for interim and
annual reporting periods ending after June 15, 2009. The Company has not
determined the impact of its adoption of this staff position.

|        |                                                                                        
|------- | ---------------------------------------------------------------------------------------
|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, Escalades ability to
successfully integrate the operations of acquired assets and businesses, 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,
Escalades ability to obtain financing and to maintain compliance with the
terms of such financing, 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.

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 market presence in
niche markets. This strategy is heavily dependent on expanding the customer
base, barriers to entry, brand recognition and excellent customer service. 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 cost
effective manner while maintaining a diversified product line and wide customer
base. In addition to strategic customer relations, the Company has substantial
manufacturing and import experience that enable it to be a low cost supplier.

A majority of the Companys products are in markets that are
experiencing low growth rates. Where the Company enjoys a commanding market
position, such as table tennis tables in the Sporting Goods segment and paper
folding machines in the Office Products segment, revenue growth is expected to
be roughly equal to general growth/decline in the economy. However, in markets
that are fragmented and where the Company is not the dominant leader, such as
archery in the Sporting Goods segment and data security shredders in the Office
Products segment, the Company anticipates growth. To enhance internal growth,
the Company has a strategy of acquiring companies or product lines that
complement or expand the Companys product lines. A key objective is the
acquisition of product lines with barriers to entry that the Company can take
to market through its established distribution channels or through new market
channels. Significant synergies are achieved through assimilation of acquired
product lines into the existing company structure. Management believes that key
indicators in measuring the success of this strategy are revenue growth,
earnings growth and the expansion of channels of distribution.

10

---



Results of Operations

Consolidated net sales for the first quarter of 2009 were down in both
the Sporting Goods and Office Product segments compared to the same quarter
last year; however, improved gross margin percentages helped reduce the
operating loss to $.6 million for the quarter compared to an operating loss of
$1.1 million for the same quarter last year.

The following schedule sets forth certain consolidated statement of
operations data as a percentage of net revenue:

|                                               |  |                    |       |                |  |       |  
|---------------------------------------------- |  | ------------------ | ----- | -------------- |  | ----- | -
|                                               |  | Three months ended |      
|                                               |  | March 21, 2009     |       | March 22, 2008 | 
|                                               |  |                    |       |                | 
|Net
  revenue                                  |  |                    | 100.0 | %              |  | 100.0 | %
|Cost of products sold                          |  |                    | 68.5  | %              |  | 71.1  | %
|                                               |  |                    |       |                |  |       |  
|Gross
  margin                                 |  |                    | 31.5  | %              |  | 28.9  | %
|Selling, administrative and
  general expenses |  |                    | 32.1  | %              |  | 31.0  | %
|Amortization                                   |  |                    | 1.9   | %              |  | 1.5   | %
|                                               |  |                    |       |                |  |       |  
|Operating
  loss                               |  |                    | -2.5  | %              |  | -3.6  | %
|                                               |  |                    |       |                |  |       |  

Consolidated
Revenue and Gross Margin

Revenues from the Sporting Goods business were down 11% in the first
quarter compared to the same quarter last year due to several factors. Dealers
are reducing inventory in light of the economy to conserve cash in light of the
economy. Within many sporting goods categories, consumers are buying
lower-priced models rather than high-end systems. Management believes that
total sales to its mass-market retail customers in 2009 will be slightly lower
than levels achieved in 2008.

Revenues from the Office Products business, excluding the effects of
changes in currency exchange rates, declined 14% in the first quarter compared
to the same period in 2008 primarily due to lower sales to office supply
mass-retailers in the U.S. which are being negatively impacted by the worsening
economy and a slowdown in European sales due to the slowing economy in Germany,
France and Spain. Management anticipates further declines in sales to office
product retailers as the global economy continues to decline. However, new
product launches and an expanding presence in machine dealers is expected to
lessen the impact of these declines.

The overall gross margin ratio improved by 2.6% in the first quarter of
2009 compared to the same period in 2008. The gross margin improvement is
attributed to the cost reductions and facility consolidations initiated during
2008 and the impact of price increases initiated in 2009. The Sporting Goods
business gross margin ratio improved to 22% from 18% in the prior year. Office
Products gross margin ratio improved to 47% from 45% in the prior year. The
Company continues to evaluate further cost reduction strategies to further
enhance gross margin improvements. Management expects the overall gross margin
ratio for 2009 to be greater than that achieved in 2008.

11

---



Consolidated
Selling, General and Administrative Expenses

Compared to the same period last year, consolidated selling, general
and administrative (SG&A) costs decreased 11% in the first quarter.
SG&A costs in the Sporting Goods business segment decreased 28% due to
decreased selling and marketing costs associated with the specialty retailer
and dealer channel, personnel reductions initiated during 2008 and the
consolidation of table tennis manufacturing in Mexico. The Office Products
segment also experienced a decrease in SG&A costs as a direct result of a
series of cost savings measures taken. SG&A costs in the Office Products
business decreased 18% including changes in currency exchange rates; excluding
the effect of currency exchange rates, SG&A costs in the Office Products
business declined 10% during the first quarter of 2009 compared to last year.

Provision
for Income Taxes

The effective tax rate in the first quarter of 2009 was 23% compared to
39% in the same period last year. This decrease is related to the size of the
loss incurred in the current quarter relative to the size of permanent
adjustments in taxable income which were smaller in the first quarter of 2009
than in the same period last year. The Company anticipates the effective tax
rate for 2009 to be relatively unchanged from that experienced in fiscal 2008.

Financial
Condition and Liquidity

The Company continues to experience the effect of the current economic
downturn as reflected in lower sales volumes. Total bank debt at the end of the
first quarter of 2009 was up 13% from the same period last year, but down
slightly from the latest year end. The following schedule summarizes the
Companys total bank debt:

|                               |  |                   |        |                   |   |                  |  |   |        | 
|------------------------------ |  | ----------------- | ------ | ----------------- | - | ---------------- |  | - | ------ | 
|In thousands                   |  | March 21, 
  2009 |        | March 22, 
  2008 |   | December 27,2008 | 
|                               |  |                   |        |                   |   |                  | 
|                               |  |                   |        |                   |   |                  |  |   |        | 
|Notes payable short-term       |  | $                 |       |                   | $ | 11,764           |  | $ | 46,525 | 
|Current portion long-term debt |  |                   |       |                   |   |                 |  |   |       | 
|Long term debt                 |  |                   | 46,244 |                   |   | 29,029           |  |   |       | 
|                               |  |                   |        |                   |   |                  |  |   |        | 
|Total bank debt                |  | $                 | 46,244 |                   | $ | 40,793           |  | $ | 46,525 | 
|                               |  |                   |        |                   |   |                  |  |   |        | 

As a percentage of stockholders equity, total bank debt was 59%, 46%
and 59% at March 21, 2009, March 22, 2008 and December 27, 2008, respectively.

During the first quarter of 2009, operations provided $2.1 million in
cash primarily due to reductions in accounts receivable exceeding increases in
inventory and decreases in accounts payable.

The Company funds working capital requirements through operating cash
flows and revolving credit agreements with its bank. The Company expects to
have access to the same level of revolving credit that was available in 2008.

The Company has finalized its new credit agreement with JP Morgan
Chase. The Company is continuing to market the Reynosa facility through a
national broker hired in late 2008 and is pursuing all viable offers of
purchase or lease. There have been no material changes to previously identified
cost reduction measures.

12

---



|        |                                                           
|------- | ----------------------------------------------------------
|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. The Company
attempts to minimize these risks through regular operating and financing
activities and, when considered appropriate, through the use of derivative
financial instruments. Through the first quarter of 2009, the Company has no
derivate financial instruments. The Company does not purchase, hold or sell
derivative financial instruments for trading or speculative purposes.

Interest Rates

The Companys
exposure to market-rate risk for changes in interest rates relates primarily to
its revolving variable rate bank debt which is based on both U.S. prime and
LIBOR interest rates. A hypothetical 1% or 100 basis point change in interest
rates would not have a significant effect on our consolidated financial
position or results of operation.

Foreign Currency

The Company
conducts business in various countries around the world and is therefore
subject to risks associated with fluctuating foreign exchange rates. This
revenue is generated from the operations of the Companys subsidiaries in their
respective countries and surrounding geographic areas and is primarily
denominated in each subsidiarys local functional currency. These subsidiaries
incur most of their expenses (other than inter-company expenses) in their local
functional currency and include the Euro, Great Britain Pound Sterling, Mexican
Peso and Chinese Yuan.

The geographic
areas outside the United States in which the Company operates are generally not
considered to be highly inflationary. Nonetheless, the Companys foreign
operations are sensitive to fluctuations in currency exchange rates arising
from, among other things, certain inter-company transactions that are
denominated in currencies other than the respective functional currency.
Operating results as well as assets and liabilities are also subject to the
effect of foreign currency translation when the operating results, assets and
liabilities of our foreign subsidiaries are translated into U.S. dollars in our
consolidated financial statements.

The Company
and its subsidiaries conduct substantially all their business in their
respective functional currencies to avoid the effects of cross-border
transactions. 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 as matching assets and liabilities in the same currency. Such programs
reduce, but do not entirely eliminate, the impact of currency exchange rate
changes. The Company currently has no currency exchange hedging instruments in
place. Changes in currency exchange rates may be volatile and could affect the
Companys performance.

Marketable Securities

An adverse
movement of equity market prices has impacted the Companys long-term
marketable equity securities available for sale that are included in
investments on the consolidated balance sheet. At March 21, 2009 the aggregate
fair market value of long-term marketable equity securities available for sale
was $1.2 million. The Company has not employed any hedge programs relative to
these investments.

13

---



|         |                        
|-------- | -----------------------
|Item 4T. | 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 investments 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 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 first quarter of 2009.

There have
been no changes to the Companys internal control over financial reporting that
occurred since the beginning of the Companys first quarter of 2009 that have
materially affected, or are reasonably likely to materially affect, the
Companys internal control over financial reporting.

PART II. OTHER INFORMATION

|         |                
|-------- | ---------------
|Item 1.  | Not
  Required.
|         |                
|Item 1A. | Not
  Required.

14

---



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

|                                                                             |  |                                                   |         |                                              |   |                                                                                                     |  |                                                                                                                                 |             |  |   |             | 
|---------------------------------------------------------------------------- |  | ------------------------------------------------- | ------- | -------------------------------------------- | - | --------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------- | ----------- |  | - | ----------- | 
|Period                                                                       |  | (a)
  Total Number of Shares (or Units) Purchased |         | (b)
  Average Price Paid per Share (or Unit) |   | (c)
  Total Number of Shares (or Units) Purchased as Part of Publicly Announced
  Plans or Programs |  | (d)
  Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May
  Yet Be Purchased Under the Plans or Programs |            
|                                                                             |  |                                                   |         |                                              |   |                                                                                                     |  |                                                                                                                                 |            
|Shares purchases prior to 12/27/2008 under the current repurchase
  program. |  |                                                   | 982,916 |                                              | $ | 8.84                                                                                                |  |                                                                                                                                 | 982,916     |  | $ | 2,273,939   | 
|                                                                             |  |                                                   |         |                                              |   |                                                                                                     |  |                                                                                                                                 |             |  |   |             | 
|First quarter purchases:                                                     |  |                                                   |         |                                              |   |                                                                                                     |  |                                                                                                                                 |             |  |   |             | 
|12/28/2009  01/24/2009                                                      |  |                                                   | None    |                                              |   | None                                                                                                |  |                                                                                                                                 | No
  Change |  |   | No
  Change | 
|01/25/2009  02/21/2009                                                      |  |                                                   | None    |                                              |   | None                                                                                                |  |                                                                                                                                 | No
  Change |  |   | No
  Change | 
|02/22/2009  03/21/2009                                                      |  |                                                   | None    |                                              |   | None                                                                                                |  |                                                                                                                                 | No
  Change |  |   | No
  Change | 
|                                                                             |  |                                                   |         |                                              |   |                                                                                                     |  |                                                                                                                                 |             |  |   |             | 
|Total share purchases under the current program                              |  |                                                   | 982,916 |                                              | $ | 8.84                                                                                                |  |                                                                                                                                 | 982,916     |  | $ | 2,273,939   | 

The Company
has one stock repurchase program which was established in February 2003 by the
Board of Directors and which initially authorized management to expend up to
$3,000,000 to repurchase shares on the open market as well as in private
negotiated transactions. In each of February 2005 and 2006, August 2007 and
February 2008 the Board of Directors increased the remaining balance on this
plan to its original level of $3,000,000. The repurchase plan has no
termination date and there have been no share repurchases that were not part of
a publicly announced program except for shares purchased in connection with the
exercise of stock options.

|        |                                                    
|------- | ---------------------------------------------------
|Item 3. | Not
  Required.                                    
|        |                                                    
|Item 4. | Submission of Matters to a Vote of Security Holders

The annual
meeting of the registrant was held on April 24, 2009 at the Companys
facilities in Evansville, Indiana. Proxy materials were circulated on April 9,
2009 proposing the election of eight members to the Board of Directors for a
one year term.

Shareholders
elected the proposed directors by the following vote totals:

|                         |  |     |            |          |  |         | 
|------------------------ |  | --- | ---------- | -------- |  | ------- | 
|                         |  | For |            | Withheld | 
|                         |  |     |            |          | 
|                         |  |     |            |          |  |         | 
|Robert E. Griffin        |  |     | 11,376,402 |          |  | 365,427 | 
|Robert J. Keller         |  |     | 11,389,367 |          |  | 352,462 | 
|Blaine E. Matthews, Jr.  |  |     | 11,658,098 |          |  | 83,731  | 
|Edward E. Williams       |  |     | 11,692,943 |          |  | 48,886  | 
|Richard D. White         |  |     | 11,719,977 |          |  | 21,852  | 
|George Savitsky          |  |     | 11,705,958 |          |  | 35,871  | 
|Richard F. Baalmann, Jr. |  |     | 11,697,190 |          |  | 44,639  | 
|Patrick J. Griffin       |  |     | 11,374,977 |          |  | 366,852 | 

15

---



|        |                
|------- | ---------------
|Item 5. | Not
  Required.
|        |                
|Item 6. | Exhibits       

|    |         
|--- | --------
|(a) | Exhibits

|       |                                                                  
|------ | -----------------------------------------------------------------
|Number | Description                                                      
|       |                                                                  
|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.            

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: May 4,
  2009 |  | /s/ Deborah
  Meinert    
|                    |  |                          
|                    |  | Vice
  President and     
|                    |  | Chief
  Financial Officer

16

---