---

SECURITIES AND EXCHANGE COMMISSIONWashington,
D.C. 20549

Form 10-Q

QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the quarter ended October 6, 2007
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)  

812-467-1334 (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, or a non-accelerated filer. See definition of accelerated
filer and large accelerated filer in Rule 12b-2 of the Exchange Act.

|                          |                     |                        
|------------------------- | ------------------- | -----------------------
|Large accelerated filer o | Accelerated filer x | Non-accelerated filer o

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 October 24, 2007
|                       |  |                                
|Common, no par
  value |  | 12,671,846                     

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INDEX

|         |                                                                                                                                                          |  |            | 
|-------- | -------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------- | 
|         |                                                                                                                                                          |  | Page
  No.
|         |                                                                                                                                                          |  |           
|Part I.  | Financial
  Information:                                                                                                                                 |  |           
|        
|Item 1 - | Financial
  Statements:                                                                                                                                  |  |            | 
|        
|         | Consolidated
  Condensed Balance Sheets as of October 6, 2007 (Unaudited), October 7, 2006
  (Unaudited), and December 30, 2006                          |  | 3          | 
|        
|         | Consolidated Condensed Statements of Income (Unaudited) for
  the Three Months and Nine Months Ended October 6, 2007 and October 7, 2006                 |  | 4          | 
|        
|         | Consolidated
  Condensed Statements of Comprehensive Income (Unaudited) for the Three Months
  and Nine Months Ended October 6, 2007 and October 7, 2006 |  | 4          | 
|        
|         | Consolidated
  Condensed Statements of Cash Flows (Unaudited) for the Nine Months Ended
  October 6, 2007 and October 7, 2006                            |  | 5          | 
|        
|         | Notes to
  Consolidated Condensed Financial Statements (Unaudited)                                                                                       |  | 6          | 
|        
|Item 2 - | Managements
  Discussion and Analysis of Financial Condition and Results of Operations                                                                  |  | 9          | 
|        
|Item 3 - | Quantitative
  and Qualitative Disclosures about Market Risk                                                                                             |  | 12         | 
|        
|Item 4 - | Controls
  and Procedures                                                                                                                                |  | 12         | 
|        
|Part II. | Other
  Information                                                                                                                                      |  |            | 
|        
|Item 2 - | Issuer
  Purchases of Equity Securities                                                                                                                  |  | 13         | 
|        
|Item 6 - | Exhibits                                                                                                                                                 |  | 14         | 
|        
|         | Signatures                                                                                                                                               |  | 14         | 

2

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PART
I.   FINANCIAL INFORMATION

ITEM
1.   FINANCIAL STATEMENTS

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

|                                                                                                                            |  |                   |         |                   |   |                     |  |   |         | 
|--------------------------------------------------------------------------------------------------------------------------- |  | ----------------- | ------- | ----------------- | - | ------------------- |  | - | ------- | 
|                                                                                                                            |  | October 6,
  2007 |         | October 7,
  2006 |   | December 30,
  2006 | 
|                                                                                                                            |  |                   |         |                   |   |                     | 
|                                                                                                                            |  | (Unaudited)       |         | (Unaudited)       |   | (Audited)           | 
|ASSETS                                                                                                                      |  |                   |         |                   |   |                     |  |   |         | 
|Current Assets:                                                                                                             |  |                   |         |                   |   |                     |  |   |         | 
|Cash and cash equivalents                                                                                                   |  | $                 | 9,623   |                   | $ | 339                 |  | $ | 3,829   | 
|Receivables, less allowance of $1,333; $2,391; and
$1,559;
  respectively                                                   |  |                   | 46,780  |                   |   | 49,517              |  |   | 33,590  | 
|Inventories                                                                                                                 |  |                   | 39,336  |                   |   | 40,426              |  |   | 32,232  | 
|Prepaid expenses                                                                                                            |  |                   | 2,487   |                   |   | 2,409               |  |   | 2,085   | 
|Deferred income tax benefit                                                                                                 |  |                   | 969     |                   |   | 1,287               |  |   | 733     | 
|Income tax receivable                                                                                                       |  |                   |        |                   |   | 684                 |  |   | 2,001   | 
|                                                                                                                            |  |                   |         |                   |   |                     |  |   |         | 
|TOTAL CURRENT ASSETS                                                                                                        |  |                   | 99,195  |                   |   | 94,662              |  |   | 74,470  | 
|                                                                                                                            |  |                   |         |                   |   |                     |  |   |         | 
|Property, plant and equipment, net                                                                                          |  |                   | 20,206  |                   |   | 20,290              |  |   | 20,657  | 
|Intangible assets                                                                                                           |  |                   | 20,911  |                   |   | 20,895              |  |   | 20,608  | 
|Goodwill                                                                                                                    |  |                   | 25,485  |                   |   | 24,708              |  |   | 25,027  | 
|Investments                                                                                                                 |  |                   | 10,325  |                   |   | 7,790               |  |   | 9,011   | 
|Interest rate swap                                                                                                          |  |                   | 107     |                   |   | 273                 |  |   | 239     | 
|Other assets                                                                                                                |  |                   | 1,065   |                   |   | 2,029               |  |   | 703     | 
|                                                                                                                            |  |                   |         |                   |   |                     |  |   |         | 
|                                                                                                                            |  | $                 | 177,294 |                   | $ | 170,647             |  | $ | 150,715 | 
|                                                                                                                            |  |                   |         |                   |   |                     |  |   |         | 
|                                                                                                                            |  |                   |         |                   |   |                     |  |   |         | 
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                        |  |                   |         |                   |   |                     |  |   |         | 
|Current liabilities:                                                                                                        |  |                   |         |                   |   |                     |  |   |         | 
|Notes payable                                                                                                               |  | $                 | 23,749  |                   | $ | 24,534              |  | $ | 10,336  | 
|Current portion of long-term debt                                                                                           |  |                   | 3,479   |                   |   |                    |  |   |        | 
|Trade accounts payable                                                                                                      |  |                   | 6,867   |                   |   | 10,071              |  |   | 3,350   | 
|Accrued liabilities                                                                                                         |  |                   | 26,162  |                   |   | 24,940              |  |   | 27,659  | 
|Income tax payable                                                                                                          |  |                   | 366     |                   |   |                    |  |   |        | 
|                                                                                                                            |  |                   |         |                   |   |                     |  |   |         | 
|TOTAL CURRENT LIABILITIES                                                                                                   |  |                   | 60,623  |                   |   | 59,545              |  |   | 41,345  | 
|                                                                                                                            |  |                   |         |                   |   |                     |  |   |         | 
|Other Liabilities:                                                                                                          |  |                   |         |                   |   |                     |  |   |         | 
|Long-term debt                                                                                                              |  |                   | 27,700  |                   |   | 28,020              |  |   | 22,609  | 
|Deferred compensation                                                                                                       |  |                   | 1,055   |                   |   | 1,025               |  |   | 1,046   | 
|                                                                                                                            |  |                   |         |                   |   |                     |  |   |         | 
|                                                                                                                            |  |                   | 89,378  |                   |   | 88,590              |  |   | 65,000  | 
|                                                                                                                           
|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  12,671,846; 13,029,769; and 13,039,457; respectively |  |                   | 12,672  |                   |   | 13,030              |  |   | 13,039  | 
|Retained earnings                                                                                                           |  |                   | 70,516  |                   |   | 66,530              |  |   | 69,194  | 
|Accumulated other comprehensive income                                                                                      |  |                   | 4,728   |                   |   | 2,497               |  |   | 3,482   | 
|                                                                                                                            |  |                   |         |                   |   |                     |  |   |         | 
|                                                                                                                            |  |                   | 87,916  |                   |   | 82,057              |  |   | 85,715  | 
|                                                                                                                            |  |                   |         |                   |   |                     |  |   |         | 
|                                                                                                                            |  | $                 | 177,294 |                   | $ | 170,647             |  | $ | 150,715 | 
|                                                                                                                            |  |                   |         |                   |   |                     |  |   |         | 

See notes to Consolidated
Condensed Financial Statements.

3

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

|                                             |  |                    |        |                   |   |                   |   |                   |         |   |   |         |  
|-------------------------------------------- |  | ------------------ | ------ | ----------------- | - | ----------------- | - | ----------------- | ------- | - | - | ------- | -
|                                             |  |                    |       
|                                             |  | Three Months Ended |        | Nine Months Ended |  
|                                             |  |                    |       
|                                             |  | October 6,
  2007  |        | October 7,
  2006 |   | October 6,
  2007 |   | October 7,
  2006 |        
|                                             |  |                    |        |                   |   |                   |   |                   |        
|Net sales                                    |  | $                  | 60,687 |                   | $ | 65,583            |   | $                 | 144,684 |   | $ | 147,332 |  
|                                             |  |                    |        |                   |   |                   |   |                   |         |   |   |         |  
|Costs, expenses and other income:            |  |                    |        |                   |   |                   |   |                   |         |   |   |         |  
|Cost of products sold                        |  |                    | 45,086 |                   |   | 49,023            |   |                   | 100,997 |   |   | 104,684 |  
|Selling, general and administrative
expenses |  |                    | 9,509  |                   |   | 10,650            |   |                   | 30,047  |   |   | 31,434  |  
|                                             |  |                    |        |                   |   |                   |   |                   |         |   |   |         |  
|Operating income                             |  |                    | 6,092  |                   |   | 5,910             |   |                   | 13,640  |   |   | 11,214  |  
|                                             |  |                    |        |                   |   |                   |   |                   |         |   |   |         |  
|Interest expense, net                        |  |                    | (714   | )                 |   | (862              | ) |                   | (2,183  | ) |   | (1,926  | )
|Other income (expense)                       |  |                    | 595    |                   |   | (310              | ) |                   | (472    | ) |   | (565    | )
|                                             |  |                    |        |                   |   |                   |   |                   |         |   |   |         |  
|Income before income taxes                   |  |                    | 5,973  |                   |   | 4,738             |   |                   | 10,985  |   |   | 8,723   |  
|                                             |  |                    |        |                   |   |                   |   |                   |         |   |   |         |  
|Provision for income taxes                   |  |                    | 2,842  |                   |   | 1,746             |   |                   | 4,322   |   |   | 2,819   |  
|                                             |  |                    |        |                   |   |                   |   |                   |         |   |   |         |  
|                                             |  |                    |        |                   |   |                   |   |                   |         |   |   |         |  
|Net income                                   |  | $                  | 3,131  |                   | $ | 2,992             |   | $                 | 6,663   |   | $ | 5,904   |  
|                                             |  |                    |        |                   |   |                   |   |                   |         |   |   |         |  
|                                            
|Per Share Data:                              |  |                    |        |                   |   |                   |   |                   |         |   |   |         |  
|Basic earnings per share                     |  | $                  | 0.24   |                   | $ | 0.23              |   | $                 | 0.51    |   | $ | 0.45    |  
|Diluted earnings per share                   |  | $                  | 0.24   |                   | $ | 0.23              |   | $                 | 0.51    |   | $ | 0.45    |  
|Cash dividend paid                           |  |                    |       |                   |   |                  |   | $                 | 0.22    |   | $ | 0.20    |  

CONSOLIDATED
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

|                                                                                                              |  |   |       |   |   |       |   |   |       |   |   |       | 
|------------------------------------------------------------------------------------------------------------- |  | - | ----- | - | - | ----- | - | - | ----- | - | - | ----- | 
|Net income                                                                                                    |  | $ | 3,131 |   | $ | 2,992 |   | $ | 6,663 |   | $ | 5,904 | 
|                                                                                                              |  |   |       |   |   |       |   |   |       |   |   |       | 
|Unrealized gain on securities, net of tax of $(20), $(111), $(220)
  and $(36), respectively                  |  |   | 31    |   |   | 168   |   |   | 338   |   |   | 55    | 
|                                                                                                              |  |   |       |   |   |       |   |   |       |   |   |       | 
|Foreign currency translation adjustment                                                                       |  |   | 205   |   |   | 395   |   |   | 989   |   |   | 1,432 | 
|                                                                                                              |  |   |       |   |   |       |   |   |       |   |   |       | 
|Unrealized gain (loss) on interest rate swap agreement, net of tax of
  $17, $21, $56 and $(40), respectively |  |   | (26   | ) |   | (32   | ) |   | (86   | ) |   | 60    | 
|                                                                                                              |  |   |       |   |   |       |   |   |       |   |   |       | 
|                                                                                                              |  |   |       |   |   |       |   |   |       |   |   |       | 
|Comprehensive income                                                                                          |  | $ | 3,341 |   | $ | 3,523 |   | $ | 7,904 |   | $ | 7,451 | 
|                                                                                                              |  |   |       |   |   |       |   |   |       |   |   |       | 

See notes to Consolidated
Condensed Financial Statements.

4

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

|                                                                                         |  |                   |         |                 |   |         |  
|---------------------------------------------------------------------------------------- |  | ----------------- | ------- | --------------- | - | ------- | -
|                                                                                         |  | Nine Months Ended |        
|                                                                                         |  |                   |        
|                                                                                         |  | October 6, 2007   |         | October 7, 2006 |  
|                                                                                         |  |                   |         |                 |  
|Operating Activities:                                                                    |  |                   |         |                 |   |         |  
|Net income                                                                               |  | $                 | 6,663   |                 | $ | 5,904   |  
|Depreciation and amortization                                                            |  |                   | 4,214   |                 |   | 4,553   |  
|Adjustments necessary to reconcile net income to
net cash used by
  operating activities |  |                   | (15,530 | )               |   | (13,083 | )
|                                                                                         |  |                   |         |                 |   |         |  
|Net cash used by operating activities                                                    |  |                   | (4,653  | )               |   | (2,626  | )
|                                                                                         |  |                   |         |                 |   |         |  
|                                                                                         |  |                   |         |                 |   |         |  
|Investing Activities:                                                                    |  |                   |         |                 |   |         |  
|Purchase of property and equipment                                                       |  |                   | (1,378  | )               |   | (1,903  | )
|Proceeds from asset disposition                                                          |  |                   | 175     |                 |   |        |  
|Retirement of Life Insurance Policies                                                    |  |                   | 306     |                 |   |        |  
|Acquisition of assets                                                                    |  |                   | (3,623  | )               |   | (28,619 | )
|                                                                                         |  |                   |         |                 |   |         |  
|Net cash used by investing activities                                                    |  |                   | (4,520  | )               |   | (30,522 | )
|                                                                                         |  |                   |         |                 |   |         |  
|                                                                                         |  |                   |         |                 |   |         |  
|Financing Activities:                                                                    |  |                   |         |                 |   |         |  
|Net increase in notes payable                                                            |  |                   | 21,982  |                 |   | 32,898  |  
|Proceeds from exercise of stock options                                                  |  |                   | 140     |                 |   | 1,288   |  
|Director fees paid by issuing stock                                                      |  |                   | 133     |                 |   | 141     |  
|Purchase of common stock                                                                 |  |                   | (3,401  | )               |   | (1,376  | )
|Dividends paid                                                                           |  |                   | (2,866  | )               |   | (2,604  | )
|                                                                                         |  |                   |         |                 |   |         |  
|Net cash provided by financing activities                                                |  |                   | 15,988  |                 |   | 30,347  |  
|                                                                                         |  |                   |         |                 |   |         |  
|                                                                                         |  |                   |         |                 |   |         |  
|Effect of exchange rate changes on cash                                                  |  |                   | (1,021  | )               |   | 123     |  
|                                                                                         |  |                   |         |                 |   |         |  
|Net increase (decrease) in cash and cash equivalents                                     |  |                   | 5,794   |                 |   | (2,678  | )
|Cash and cash equivalents, beginning of period                                           |  |                   | 3,829   |                 |   | 3,017   |  
|                                                                                         |  |                   |         |                 |   |         |  
|Cash and cash equivalents, end of period                                                 |  | $                 | 9,623   |                 | $ | 339     |  
|                                                                                         |  |                   |         |                 |   |         |  

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 30, 2006 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 2006 filed with the Securities and Exchange
Commission.

Accounting Standards Implemented in 2007
 Effective December 31, 2006, Escalade adopted FIN 48 which clarifies the
accounting for uncertainty in income taxes recognized in accordance with FASB
Statement No. 109, Accounting for Income Taxes (SFAS 109). See Note E for
information relating to the implementation of this interpretation and other
required disclosures pertaining to uncertain tax positions.

Accounting Standards to Be Implemented
 In February 2007, the FASB issued Statement of Financial Accounting Standard
No. 159, The Fair Value Option for Financial Assets and Financial Liabilities
 Including an amendment of FASB Statement No. 115 (SFAS 159). This statement
permits companies to choose to measure many financial instruments and certain
other items at fair value. SFAS 159 requires additional disclosures related to
the fair value measurements included in the financial statements. This
statement is effective on December 30, 2007 for Escalade and the company is
currently in the process of evaluating the impact of this statement on the
consolidated financial statements.

|                           
|---------------------------
|Note B 
  Seasonal Aspects
|                           

The results of
operations for the nine month periods ended October 6, 2007 and October 7, 2006
are not necessarily indicative of the results to be expected for the full year.

|                      
|----------------------
|Note C 
  Inventories
|                      

| |                              |  |                   |        |                   |   |                     |  |   |        | 
| | ---------------------------- |  | ----------------- | ------ | ----------------- | - | ------------------- |  | - | ------ | 
| | (All
  amounts in thousands) |  | October 6,
  2007 |        | October 7,
  2006 |   | December 30,
  2006 | 
| |                              |  |                   |        |                   |   |                     |  |   |        | 
| | Raw
  materials              |  | $                 | 9,694  |                   | $ | 9,173               |  | $ | 7,786  | 
| | Work in
  progress           |  |                   | 7,814  |                   |   | 7,008               |  |   | 6,021  | 
| | Finished
  goods             |  |                   | 21,828 |                   |   | 24,245              |  |   | 18,425 | 
| |                              |  |                   |        |                   |   |                     |  |   |        | 
| |                              |  | $                 | 39,336 |                   | $ | 40,426              |  | $ | 32,232 | 
| |                              |  |                   |        |                   |   |                     |  |   |        | 

|                        
|------------------------
|Note D 
  Notes Payable
|                        

On May 18,
2007, the Company executed an amendment to the revolving term agreement
extending the maturity date of the credit facility to May 31, 2012 and revising
the current available borrowing limit to $30 million with annual reductions of
$5 million beginning May 31, 2008. The Euro 3.0 million ($4.1 million)
revolving term loan limit was unchanged. All other terms and conditions of the
agreement were unchanged. As of October 6, 2007 the outstanding balance on
these revolving term loans was $25.5 million and Euro 2.1 million ($3.0
million).

6

---



|                       
|-----------------------
|Note E 
  Income Taxes
|                       

The provision
for income taxes was computed based on financial statement income. During the
three months ended October 6, 2007, the Company recorded a one-time charge of
$756 thousand related to the repatriation of earnings from its European
subsidiary.

In July 2006,
the Financial Accounting Standards Board (FASB) issued 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 Interpretation prescribes a recognition threshold and a
measurement attribute for the financial statement recognition and measurement
of tax positions taken or expected to be taken in a tax return. For those
benefits to be recognized, a tax position must be more-likely-than-not to be
sustained upon examination by taxing authorities. The amount recognized is
measured as the largest amount of benefit that is greater than 50 percent
likely of being realized upon ultimate settlement. The adoption of FIN 48
during the first quarter of 2007 resulted in a transition adjustment reducing
beginning retained earnings by $264 thousand; $164 thousand in taxes and $100
thousand in interest. If recognized, the tax portion of the adjustment would
affect the effective tax rate. Interest costs and penalties related to income
taxes are classified as interest expense and selling, general and
administrative costs, respectively in the Companys financial statements. Tax
returns for all years after 2002 are subject to future examination by tax
authorities.

|                                      
|--------------------------------------
|Note F 
  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).

At the Annual
Shareholder meeting in April 2007, the Escalade, Incorporated 2007 Incentive
Plan (2007 Inventive Plan) was approved as a replacement for the 1997
Incentive Stock Option Plan and the 1997 Director Stock Compensation and Option
Plan which expired at the end of April 2007. All options issued and outstanding
under the expired plans remain in effect until exercised, expired or forfeited.

During the
nine months ended October 6, 2007 and pursuant to the 2007 Incentive Plan, the
Company awarded 6,524 stock options and 9,947 restricted stock units to
directors and 130,250 restricted stock units to employees. The stock options
awarded to directors vest at the end of one year and have an exercise price
equal to the market price on the date of grant. The restricted stock units
awarded to the directors vest after one year following the grant date. The
restricted stock units awarded to employees vest at the end of three years
conditioned on the achievement of specified market conditions. The number of
shares issued to employees can range between 75% and 150% of the award amount
depending on the outcome of specified performance criteria. 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.

The Company
utilizes the Black-Scholes option pricing model to determine the fair value of
stock options granted and Monte Carlo techniques to determine the fair value of
restricted stock units granted with market conditions attached to vesting.

For the three
months and nine months ended October 6, 2007 the company recognized stock based
compensation expense of $162 thousand and $552 thousand, respectively. Stock
based compensation expense for the three months and nine months ended October
7, 2006 was $298 thousand and $726 thousand, respectively.

At October 6,
2007, there was $1.2 million in unrecognized stock-based compensation expense
related to non-vested stock awards.

7

---



|                              
|------------------------------
|Note G -
  Segment Information
|                              

|                                 |  |                                              |        |                   |   |        |  |       |      |   |   |        | 
|-------------------------------- |  | -------------------------------------------- | ------ | ----------------- | - | ------ |  | ----- | ---- | - | - | ------ | 
|                                 |  | For the Three Months
  Ended October 6, 2007 |       
|                                 |  |                                              |       
|In
  thousands                   |  | Sporting
  Goods                             |        | Office
  Products |   | Corp.  |  | Total |     
|                                 |  |                                              |        |                   |   |        |  |       |     
|                                 |  |                                              |        |                   |   |        |  |       |      |   |   |        | 
|Revenues from external customers |  | $                                            | 47,403 |                   | $ | 13,284 |  | $     |     |   | $ | 60,687 | 
|Operating income (loss)          |  |                                              | 4,803  |                   |   | 2,091  |  |       | (802 | ) |   | 6,092  | 
|Net income (loss)                |  |                                              | 3,409  |                   |   | 350    |  |       | (628 | ) |   | 3,131  | 

|                                 |  |                                                       |         |                   |   |        |  |       |        |   |   |         | 
|-------------------------------- |  | ----------------------------------------------------- | ------- | ----------------- | - | ------ |  | ----- | ------ | - | - | ------- | 
|                                 |  | As of and for the Nine Months
  Ended October 6, 2007 |        
|                                 |  |                                                       |        
|In
  thousands                   |  | Sporting
  Goods                                      |         | Office
  Products |   | Corp.  |  | Total |       
|                                 |  |                                                       |         |                   |   |        |  |       |       
|                                 |  |                                                       |         |                   |   |        |  |       |       
|Revenues from external customers |  | $                                                     | 101,973 |                   | $ | 42,711 |  | $     |       |   | $ | 144,684 | 
|Operating income (loss)          |  |                                                       | 9,201   |                   |   | 7,063  |  |       | (2,624 | ) |   | 13,640  | 
|Net income (loss)                |  |                                                       | 5,145   |                   |   | 3,922  |  |       | (2,404 | ) |   | 6,663   | 
|Total assets                     |  | $                                                     | 108,653 |                   | $ | 55,589 |  | $     | 13,052 |   | $ | 177,294 | 

|                                 |  |                                              |        |                   |   |        |  |       |      |   |   |        | 
|-------------------------------- |  | -------------------------------------------- | ------ | ----------------- | - | ------ |  | ----- | ---- | - | - | ------ | 
|                                 |  | For the Three Months
  Ended October 7, 2006 |       
|                                 |  |                                              |       
|In
  thousands                   |  | Sporting
  Goods                             |        | Office
  Products |   | Corp.  |  | Total |     
|                                 |  |                                              |        |                   |   |        |  |       |     
|                                 |  |                                              |        |                   |   |        |  |       |     
|Revenues from external customers |  | $                                            | 51,967 |                   | $ | 13,616 |  | $     |     |   | $ | 65,583 | 
|Operating income (loss)          |  |                                              | 5,094  |                   |   | 1,800  |  |       | (984 | ) |   | 5,910  | 
|Net income                       |  |                                              | 2,051  |                   |   | 854    |  |       | 87   |   |   | 2,992  | 

|                                 |  |                                                       |         |                   |   |        |  |       |        |   |   |         | 
|-------------------------------- |  | ----------------------------------------------------- | ------- | ----------------- | - | ------ |  | ----- | ------ | - | - | ------- | 
|                                 |  | As of and for the Nine Months
  Ended October 7, 2006 |        
|                                 |  |                                                       |        
|In
  thousands                   |  | Sporting
  Goods                                      |         | Office
  Products |   | Corp.  |  | Total |       
|                                 |  |                                                       |         |                   |   |        |  |       |       
|                                 |  |                                                       |         |                   |   |        |  |       |        |   |   |         | 
|Revenues from external customers |  | $                                                     | 105,027 |                   | $ | 42,305 |  | $     |       |   | $ | 147,332 | 
|Operating income (loss)          |  |                                                       | 8,017   |                   |   | 6,334  |  |       | (3,137 | ) |   | 11,214  | 
|Net income (loss)                |  |                                                       | 2,964   |                   |   | 3,425  |  |       | (485   | ) |   | 5,904   | 
|Total assets                     |  | $                                                     | 112,815 |                   | $ | 46,534 |  | $     | 11,298 |   | $ | 170,647 | 

|                             
|-----------------------------
|Note H -
  Earnings Per Share
|                             

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

|                                                              |  |                    |        |                   |  |                   |  |                   |        |  |  |        | 
|------------------------------------------------------------- |  | ------------------ | ------ | ----------------- |  | ----------------- |  | ----------------- | ------ |  |  | ------ | 
|                                                              |  | Three Months Ended |        | Nine Months Ended | 
|                                                              |  |                    |        |                   | 
|All amounts in thousands                                      |  | October 6,
  2007  |        | October 7,
  2006 |  | October 6,
  2007 |  | October 7,
  2006 |       
|                                                              |  |                    |        |                   |  |                   |  |                   |       
|                                                              |  |                    |        |                   |  |                   |  |                   |        |  |  |        | 
|Weighted average common shares outstanding                    |  |                    | 12,889 |                   |  | 13,026            |  |                   | 12,938 |  |  | 13,007 | 
|Dilutive effect of stock options and
  restricted stock units |  |                    | 13     |                   |  | 30                |  |                   | 14     |  |  | 33     | 
|                                                              |  |                    |        |                   |  |                   |  |                   |        |  |  |        | 
|Weighted average common shares outstanding, assuming dilution |  |                    | 12,902 |                   |  | 13,056            |  |                   | 12,952 |  |  | 13,040 | 
|                                                              |  |                    |        |                   |  |                   |  |                   |        |  |  |        | 

8

---



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 2007 and 2006 were
561,843 and 613,800, respectively.

|                          
|--------------------------
|Note I 
 Dividend Payment
|                          

On March 16,
2007, the Company paid a dividend of $0.22 per common share to all shareholders
of record on March 9, 2007. The total amount of the dividend was approximately
$2.9 million and was charged against retained earnings.

|                      
|----------------------
|Note J -
 Acquisitions
|                      

In February
2007, the Company purchased substantially all of the assets of Trophy Ridge,
LLC, which manufactures and sells premium archery accessories under the Trophy
Ridge brand name. The Trophy Ridge brand name has significant appeal in the
sports enthusiast market place and will be used to further expand distribution
of the Companys archery accessory products. The Trophy Ridge operation has
been relocated and consolidated into the Companys existing archery operations
in the Gainesville, Florida plant. The operating results of Trophy Ridge will
be included in the Sporting Goods segment results from the date of acquisition.
The purchase price of $3.8 million was paid in Cash. Contingent on the
achievement of certain performance criteria, the Company may be obligated to
pay an additional $1.0 million over a two year period from the date of
acquisition. The estimated fair market value of the assets acquired as of the
date of acquisition is as follows:

|                             |  |        |       |  | 
|---------------------------- |  | ------ | ----- |  | 
|(Amounts in thousands)       |  | Amount |      
|                             |  |        |      
|                             |  |        |       |  | 
|Current
 assets              |  | $      | 1,083 | 
|Property,
 plant & equipment |  |        | 170   | 
|Other assets                 |  |        | 125   | 
|Patents
 & Trademarks        |  |        | 2,376 | 
|                             |  |        |       | 
|Net assets acquired          |  | $      | 3,754 | 
|                             |  |        |       | 

|        |                                                                                       
|------- | --------------------------------------------------------------------------------------
|ITEM 2. | MANAGEMENTS
 DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-Looking Statements

This report
contains forward-looking statements relating to present or future trends or
factors that are subject to risks and uncertainties. These risks include, but
are not limited to, the impact of competitive products and pricing, product
demand and market acceptance, new product development, the continuation and
development of key customer and supplier relationships, Escalades ability to
control costs, general economic conditions, fluctuation in operating results,
changes in the securities market and other risks detailed from time to time in
Escalades filings with the Securities and Exchange Commission. Escalades
future financial performance could differ materially from the expectations of
management contained herein. Escalade undertakes no obligation to release
revisions to these forward-looking statements after the date of this report.

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 over 75 years of
manufacturing and import experience that enable it to be a low cost supplier.

9

---



Results of Operations

Net sales for
the quarter and nine months ended October 6, 2007, were down 7.5% and 1.8%,
respectively, over the same periods last year. However, operating income was up
3.1% for the quarter and 21.6% for the nine months ended October 6, 2007,
compared to the same periods last year due to improved operating performance in
both business segments. Consequently, net income was also up for the quarter
and nine months; 4.6% and 12.9%, respectively.

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

|                                              |  |  |                    |   |  |                   |   |  |                  |   |  |                  |  
|--------------------------------------------- |  |  | ------------------ | - |  | ----------------- | - |  | ---------------- | - |  | ---------------- | -
|                                              |  |  | Three Months ended |   |  | Nine Months ended |  
|                                              |  |  |                    |   |  |                   |  
|                                              |  |  | October 6,
 2007   |   |  | October 7,
 2006  |   |  | October 6,
 2007 |   |  | October 7,
 2006 |  
|                                              |  |  |                    |   |  |                   |   |  |                  |   |  |                  |  
|Net revenue                                   |  |  | 100.0              | % |  | 100.0             | % |  | 100.0            | % |  | 100.0            | %
|Cost of
 products sold                        |  |  | 74.3               | % |  | 74.7              | % |  | 69.8             | % |  | 71.1             | %
|                                              |  |  |                    |   |  |                   |   |  |                  |   |  |                  |  
|Gross margin                                  |  |  | 25.7               | % |  | 25.3              | % |  | 30.2             | % |  | 28.9             | %
|Selling,
 administrative and general expenses |  |  | 15.7               | % |  | 16.3              | % |  | 20.8             | % |  | 21.3             | %
|                                              |  |  |                    |   |  |                   |   |  |                  |   |  |                  |  
|Operating income                              |  |  | 10.0               | % |  | 9.0               | % |  | 9.4              | % |  | 7.6              | %

Consolidated Revenue and Gross Margin

Third quarter
sales in the Sporting Goods business declined 8.8%; primarily due to continued
industry-wide erosion in consumer demand for soccer and hockey game tables
which are primarily sold through mass retail customers. Poor third quarter
sales translated into a 2.9% decline in year-to-date sales compared to the same
nine months last year. Sales to mass retail customers declined 11.2% and 11.6%
for the quarter and nine months ended October 6, 2007, respectively, compared
to the same periods last year. Approximately 84% of this decline is
attributable to the declining consumer demand for soccer and hockey tables. The
Company continues to enjoy strong relationships with its mass market retail
customers and is actively working with them to improve sales. However, there is
no expectation that the current declining demand for game tables will abate in
the near future. Accordingly, management believes sales to mass retail
customers will continue to decline through the remainder of 2007. As a means of
lessening reliance on mass retail customers, the Company continues to execute
its strategy of expanding distribution in the specialty market which is
composed of specialty sporting goods retailers and dealers. Sales to the
specialty market grew 10.2% in the third quarter and 20.7% year-to-date
compared to the same periods last year. The specialty market now represents
38.2% of the Companys total year-to-date sporting goods revenues compared to
31.2% for the same period last year. Management anticipates that total 2007
revenues for the Sporting Goods business segment will be relatively unchanged
from fiscal 2006.

Compared to
the prior year, Office Product sales were down 2.4% for the third quarter but
up 1.0% for the nine months ended October 6, 2007. Sales for the nine months
declined 7.7% in North America while sales in Europe increased 12.5%. The
decline in North America is due primarily to declining demand at the Companys
office product wholesale customers who are experiencing a decline in demand for
office machinery. In response, the Office Products business is focused heavily
on increasing its specialty dealer base. Because roughly 48% of the Office
Products business segment derives its revenues from Europe, it has benefited
from the increased strength of the Euro against the US dollar. Excluding the
effects of changing exchange rates, revenues from the Office Products business
segment decreased 5.5% and 2.7% in the third quarter and nine months ended
October 6, 2007, respectively, compared to the same periods last year.
Including the effects of changing exchange rates, Management expects total 2007
revenues from the Office Products business segment will be relatively unchanged
from the results achieved in 2006.

10

---



The overall
gross margin ratio for the third quarter was relatively unchanged from last
year. However, the year-to-date gross margin ratio is higher than the same
period last year due to the higher gross margin ratios associated with
expanding sales in the specialty market. Management anticipates the overall
gross margin ratio for fiscal 2007 to be slightly better than that achieved in
2006.

Consolidated Selling, General and
Administrative Expenses

Total selling,
general and administrative expenses declined 10.7% in the third quarter of
fiscal 2007 and 4.4% in the nine months ended October 6, 2007 compared to the
same periods last year primarily as a result of reduced headcount and
compensation costs in both the Sporting Goods and the Office Products business
segments. The ratio of total selling, general and administrative costs to total
revenues also declined as the Company continues to look for ways to improve
profitability. Management anticipates the expense to sales ratio achieved
year-to-date in 2007 to be indicative of the overall results for fiscal 2007.

Interest Expense and Other Income (Expense)

Interest costs
for the third quarter of fiscal 2007 were lower than the same period last year
due to lower average daily total borrowing balances; $44.6 million in fiscal
2007 compared to $55.4 million in fiscal 2006. Year-to-date interest costs are
higher due to higher effective interest rates.

During the
third quarter of fiscal 2007, the Company recorded a one-time gain of $1.5
million on the sale of rights of first refusal to license intellectual
property that a third party might develop in the future. This gain was recorded
in other income. Excluding this gain, other expense for the quarter and nine
months ended October 6, 2007 were higher than the same periods last year due to
the Companys share of net losses reported by one of the Companys 50% equity
ownership investments in the current year.

Provision for Income Taxes

During the
third quarter of fiscal 2007, the Company repatriated earnings from its
European subsidiary and recorded a tax charge of $756 thousand. Excluding this
one-time charge, the effective tax rate for the third quarter and nine months
ended October 6, 2007 would have been 34.9% and 32.5%, respectively. These
rates are similar to the rates achieved last year and indicative of the overall
effective tax rates expected for fiscal 2007 excluding the one-time additional
charge.

Financial Condition and Liquidity

The following
schedule summarizes the Companys total debt:

|                                |  |                  |        |                  |   |                    |  |   |        | 
|------------------------------- |  | ---------------- | ------ | ---------------- | - | ------------------ |  | - | ------ | 
|In
 thousands                   |  | October 6,
 2007 |        | October 7,
 2006 |   | December 30,
 2006 | 
|                                |  |                  |        |                  |   |                    | 
|Notes
 payable short-term       |  | $                | 23,749 |                  | $ | 24,534             |  | $ | 10,336 | 
|Current
 portion long-term debt |  |                  | 3,479  |                  |   |                   |  |   |       | 
|Long term
 debt                 |  |                  | 27,700 |                  |   | 28,020             |  |   | 22,609 | 
|                                |  |                  |        |                  |   |                    |  |   |        | 
|Total debt                      |  | $                | 54,928 |                  | $ | 52,554             |  | $ | 32,945 | 
|                                |  |                  |        |                  |   |                    |  |   |        | 

The increased debt balance at October 6, 2007, compared to last year, is deemed to be a timing
issue. Daily average total debt balances for the third quarter of fiscal 2007 were
15% lower than the same quarter in fiscal 2006. Total debt levels at October 6,
2007 are higher than at December 30, 2006 as a result of funding the Trophy
Ridge acquisition during the first quarter of fiscal 2007, the payment of a
dividend and the repurchase of Company stock. The Company anticipates total
debt balances at the end of fiscal 2007 will be slightly less than the balances
achieved at the end of fiscal 2006. As a percentage of stockholders equity,
total bank debt was 62.5% at October 6, 2007, 64.0% at October 7, 2006, and
38.4% at December 30, 2006.

11

---



Significant
acquisitions completed during the first half of 2006 account for the difference
in net cash used by investing activities in 2007 compared to the same period in
2006. Spending on property, plant and equipment for the first nine months of
fiscal 2007 was slightly less than the same time period in 2006. During the
fourth quarter of fiscal 2007, management expects to purchase Enterprise
Resource Planning (ERP) software for implementation in 2008. The total
installed system is expected to cost roughly $3 million with most of these
costs being incurred in fiscal 2008.

The Companys
working capital requirements are primarily funded from operating cash flows and
revolving credit agreements with its banks. The Companys relationship with its
primary lending bank remains strong and the Company expects to have access to
the same level of revolving credit that was available in 2006. In addition, the
Company believes it can quickly reach agreement to increase available credit
should the need arise.

|        |                                                            
|------- | -----------------------------------------------------------
|ITEM 3. | QUANTITATIVE
 AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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

A substantial
majority of revenue, expense and capital purchasing activities are transacted
in U.S. dollars. However, the Companys foreign subsidiaries enter into
transactions in other currencies, primarily the Euro. To protect against reductions
in value and the volatility of future cash flows caused by changes in currency
exchange rates, the Company carefully considers the use of transaction and
balance sheet hedging programs. Such programs reduce, but do not entirely
eliminate, the impact of currency exchange rate changes. Presently the Company
does not employ currency exchange hedging financial instruments, but has
adjusted transaction and cash flows to mitigate adverse currency fluctuations.
Historical trends in currency exchanges indicate that it is reasonably possible
that adverse changes in exchange rates of 20% for the Euro could be experienced
in the near term. Such adverse changes could have resulted in a material impact
on income before taxes for the three months and nine months ended October 6,
2007.

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

An adverse
movement of equity market prices would have an impact on the Companys
long-term marketable equity securities that are included in other assets on the
consolidated balance sheet. At October 6, 2007 the aggregate carrying value of
long-term marketable equity securities was $4.7 million. Currently, the Company
does not employ any hedge programs relative to these investments

|        |                         
|------- | ------------------------
|ITEM 4. | CONTROLS AND
 PROCEDURES

Evaluation of Disclosure Controls and
Procedures

Escalade
maintains disclosure controls and procedures that are designed to ensure that
information required to be disclosed in the Companys Exchange Act reports is
recorded, processed, summarized and reported within the time periods specified
in the SECs rules and forms, and that such information is accumulated and
communicated to the Companys management, including its Chief Executive Officer
and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure based closely on the definition of disclosure
controls and procedures in Rule 13a-14(c). In designing and evaluating the
disclosure controls

12

---



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 third quarter of fiscal 2007.

There have
been no changes to the Companys internal control over financial reporting that
occurred since the beginning of the Companys third quarter of fiscal 2007 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.                            
|         |                                           
|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 purchased prior to
 07/14/2007 under the
 current repurchase
 program. |  |                                                     | 577,533 |                                                 | $ | 9.30                                                                                                     |  |                                                                                                                                        | 577,533   |  | $ | 3,000,000 | 
|Third
 quarter purchases:                                                     |  |                                                     |         |                                                 |   |                                                                                                          |  |                                                                                                                                        |           |  |   |           | 
|07/15/2007 
 08/11/2007                                                      |  |                                                     | None    |                                                 |   | None                                                                                                     |  |                                                                                                                                        | No change |  |   | No change | 
|08/12/2007 
 09/08/2007                                                      |  |                                                     | None    |                                                 |   | None                                                                                                     |  |                                                                                                                                        | No change |  |   | No change | 
|09/09/2007 
 10/06/2007                                                      |  |                                                     | 315,000 |                                                 | $ | 8.25                                                                                                     |  |                                                                                                                                        | 892,533   |  | $ | 401,250   | 
|Total share purchases
 under the current
 program                             |  |                                                     | 892,533 |                                                 | $ | 8.93                                                                                                     |  |                                                                                                                                        | 892,533   |  | $ | 401,250   | 

13

---



The Company
has one stock repurchase program which was established in February 2003 by the
Board of Directors and which authorized management to expend up to $3,000,000
to repurchase shares on the open market as well as in private negotiated
transactions. The repurchase plan has no termination date. There have been no
share repurchases that were not part of a publicly announced program. In
February 2006 and again in August 2007, the Board of Directors increased the
remaining amount on this plan to its original level of $3,000,000.

|                 |              
|---------------- | -------------
|Item 3, 4 and 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.                                          
|10.1   | Employment
 Offer letter dated July 23, 2007 between Mr. Robert Keller and Escalade, Inc.
 (a)

|    |                                                                                                                            
|--- | ---------------------------------------------------------------------------------------------------------------------------
|(a) | Incorporated
 by reference from the Companys Form 8-K filed with the Securities and
 Exchange Commission on July 24, 2007.

SIGNATURE

Pursuant to
the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.

|                        |                                            
|----------------------- | -------------------------------------------
|                        | ESCALADE,
 INCORPORATED                    
|                        |                                            
|Date: October 24,
 2007 | /s/ Robert
 J. Keller                      
|                        |                                            
|                        | Robert J.
 Keller                          
|                        | Chief
 Executive Officer                   
|                        |                                            
|                        |                                            
|Date: October 24,
 2007 | /s/ Terry D.
 Frandsen                     
|                        |                                            
|                        | Terry D.
 Frandsen                         
|                        | Vice
 President and Chief Financial Officer

14

---