SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549


                          Form 10-Q/A (Amendment No. 1)


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

                      For the quarter ended March 25, 2006
                          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 [ ]

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 [ ]   Accelerated filer [X]   Non-accelerated filer [ ]

Indicate by checkmark whether the registrant is a shell company (as defined in
Rule 12 b-2 of the Exchange Act). Yes [ ] 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 12, 2006
                  -----                     -----------------------------
          Common, no par value                        13,028,940
<PAGE>

                                      INDEX


                                                                            Page
                                                                            No.


           Explanatory Note


Part I.    Financial Information:

Item 1 -   Financial Statements:


           Consolidated Condensed Balance Sheets as of March 25, 2006,
           March 19, 2005, and December 31, 2005                            4

           Consolidated Condensed Statements of Income for the Three
           Months Ended March 25, 2006 and March 19, 2005                   5

           Consolidated Condensed Statements of Comprehensive
           Income for the Three Months Ended March 25, 2006 and
           March 19, 2005                                                   5

           Consolidated Condensed Statements of Cash Flows for the
           Three Months Ended March 25, 2006 and March 19, 2005             6

           Notes to Consolidated Condensed Financial Statements             7

Item 2 -   Management's Discussion and Analysis of Financial Condition
           and Results of Operations                                        11

Item 3 -   Quantitative and Qualitative Disclosures about Market Risk       13

Item 4 -   Controls and Procedures                                          14

Part II.   Other Information

Item 2 -   Issuer Purchases of Equity Securities                            15

Item 6 -   Exhibits                                                         16

           Signatures                                                       16


                                       2
<PAGE>


                                Explanatory Note

This Amendment No. 1 on Form 10-Q/A to the Annual Report on Form 10-Q for the
quarter ended March 25, 2006, filed with the Securities and Exchange Commission
(SEC) on April 12, 2006 is being filed to restate the consolidated financial
statements and other financial information for the quarters ended March 25, 2006
and March 19, 2005 to give effect to adjustments resulting from the
identification of errors related to the overstatement of the provision for
income taxes and employee benefit costs. On February 13, 2007, the Audit
Committee of the Board of Directors of Escalade, Incorporated ("Escalade"), upon
the recommendation of Escalade's management and in conjunction with Escalade's
independent registered public accounting firm, BKD, LLP, determined that the
errors identified were material to the financial statements for the quarters
ended March 25, 2006 and March 19, 2005 and that, as a result, the previously
issued financial statements for those periods should no longer be relied on. A
new footnote (Note K) has been added to the restated consolidated financial
statements to discuss the restatement effects. This Form 10-Q/A (Amendment No.1)
amends and restates Items 1 and 4 along with Notes H and J of the April 12, 2006
filing. Only the adjustments described herein and no other material information
in our April 12, 2006 filing is amended hereby. Except for the foregoing amended
information, this Form 10-Q/A does not reflect events occurring after April 12,
2006, nor does it modify or update those disclosures, except as discussed above
or in Note K to the Consolidated Financial Statements. Escalade will also amend
the second and third quarter 10-Q filings of 2006 for the same errors.


                                       3
<PAGE>

PART I.  FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

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

<TABLE>
<CAPTION>
                                                            March 25,      March 19,       December
                                                              2006           2005          31, 2005
                                                           (Unaudited)    (Unaudited)      (Audited)

                                                           (Restated)     (Restated)      (Restated)

<S>                                                       <C>            <C>             <C>
ASSETS
Current Assets:
         Cash and cash equivalents                        $      2,094   $      4,872    $      3,017
         Receivables, less allowance of
            $2,229; $2,220; and $1,544;
            respectively                                        26,394         31,873          31,744
         Inventories                                            36,584         36,051          33,049
         Prepaid expenses                                        1,524          2,960           1,559


         Deferred income tax benefit                             1,283          1,720           1,382
         Income tax receivable                                   1,132            123              --
                                                          ------------   ------------    ------------
TOTAL CURRENT ASSETS                                            69,011         77,599          70,751


Property, plant and equipment, net                              21,080         15,773          20,307
Intangible assets                                                6,541          7,789           6,634
Goodwill                                                        21,759         17,793          17,157
Investments                                                      7,767          6,364           7,786
Interest rate swap                                                 247           (302)            181

Other assets                                                     1,606          2,987           2,044
                                                          ------------   ------------    ------------

                                                          $    128,011   $    128,003    $    124,860
                                                          ============   ============    ============


LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
         Notes payable                                    $          5   $         --    $         --
         Current portion of long-term debt                         906            354           1,066
         Trade accounts payable                                  5,109          5,513           3,518


         Accrued liabilities                                    18,270         20,548          23,728
         Income tax payable                                         --             --              89
                                                          ------------   ------------    ------------
TOTAL CURRENT LIABILITIES                                       24,290         26,415          28,401


Other Liabilities:
         Long-term debt                                         26,016         30,589          18,487
         Deferred compensation                                   1,378          1,260           1,349
                                                          ------------   ------------    ------------

 TOTAL LIABILITIES                                              51,684         58,264          48,237

Stockholders' equity:
Preferred stock:
         Authorized 1,000,000 shares; no par
                value, none issued
Common stock:
         Authorized 30,000,000 shares; no
                par value, issued and outstanding -
                13,028,940; 13,072,982; and 12,946,869;
                shares respectively                             13,029         13,073          12,947

Retained Earnings                                               62,106         52,699          62,726

Accumulated other comprehensive income                           1,192          3,967             950
                                                          ------------   ------------    ------------

                                                                76,327         69,739          76,623
                                                          ------------   ------------    ------------
                                                          $    128,011   $    128,003    $    124,860
                                                          ============   ============    ============
</TABLE>


See notes to Consolidated Condensed Financial Statements.

                                       4
<PAGE>

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


                                                        Three Months Ended
                                                   ----------------------------
                                                     March 25,       March 19,
                                                       2006            2005

                                                    (Restated)      (Restated)


 Net Sales                                         $     32,800    $     29,782

 Costs, expenses and other income:
      Cost of products sold                              22,048          20,859
      Selling, general and administrative expenses        8,405           7,175
                                                   ------------    ------------
Operating income                                          2,347           1,748

Interest expense, net                                      (254)           (286)
Other income (expense)                                      (65)            245
                                                   ------------    ------------
Income before income taxes                                2,028           1,707


Provision for income taxes                                  304             469
                                                   ------------    ------------

Net income                                         $      1,724    $      1,238
                                                   ============    ============

Per Share Data:
      Basic earnings per share                     $       0.13    $       0.09
      Diluted earnings per share                   $       0.13    $       0.09
      Cash dividend paid                           $       0.20    $       0.15





CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)


 Net income                                        $      1,724    $      1,238


Unrealized gain (loss) on securities, net of
   tax of $(97) and $15, respectively                       146             (22)

Foreign currency translation adjustment, net of
   tax of $(35) and $412, respectively                       53            (618)

Unrealized gain on interest rate swap agreement
   net of tax of $(29) and $(36), respectively               43              54
                                                   ------------    ------------


 Comprehensive income                              $      1,966    $        652
                                                   ============    ============


See notes to Consolidated Condensed Financial Statements.

                                       5
<PAGE>

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

<TABLE>
<CAPTION>
                                                              Three Months Ended
                                                       --------------------------------
                                                       March 25, 2006    March 19, 2005

                                                         (Restated)        (Restated)

<S>                                                    <C>               <C>
Operating Activities:

      Net income                                       $        1,724    $        1,238

      Depreciation and amortization                               933             1,184
      Employee stock-based compensation                           130                --

      Adjustments necessary to
            reconcile net income to net
            cash provided by operating
            activities                                           (485)            1,718
                                                       --------------    --------------

      Net cash provided by operating
            activities                                          2,302             4,140
                                                       --------------    --------------

Investing Activities:
      Purchase of property and equipment                       (1,263)             (266)
      Acquisition of assets                                    (7,436)           (3,272)
      Investment in affiliate                                      --              (237)
                                                       --------------    --------------
      Net cash used by investing activities                    (8,699)           (3,775)
                                                       --------------    --------------

Financing Activities:
      Net increase in notes payable                             7,928             3,608
      Proceeds from exercise of stock options                     440               123
      Purchase of common stock                                   (227)             (109)
      Dividends paid                                           (2,606)           (1,961)
                                                       --------------    --------------
      Net cash provided by financing activities                 5,535             1,661
                                                       --------------    --------------
Effect of exchange rate changes on cash                           (61)             (204)
                                                       --------------    --------------
Net (decrease) increase in cash and cash equivalents             (923)            1,822
Cash and cash equivalents, beginning of period                  3,017             3,050
                                                       --------------    --------------
Cash and cash equivalents, end of period               $        2,094    $        4,872
                                                       ==============    ==============
</TABLE>

See notes to Consolidated Condensed Financial Statements.

                                       6
<PAGE>

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

Note A - Basis of Presentation
--------------------------------------------------------------------------------

The significant accounting policies followed by the Company and its wholly owned
subsidiaries for interim financial reporting are consistent with the accounting
policies followed for annual financial reporting. All adjustments that are of a
normal recurring nature and are in the opinion of management necessary for a
fair statement of the results for the periods reported have been included in the
accompanying consolidated condensed financial statements. The condensed
consolidated balance sheet of the Company as of December 31, 2005 has been
derived from the audited consolidated balance sheet of the Company as of that
date. Certain information and note disclosures normally included in the
Company's annual financial statements prepared in accordance with accounting
principles generally accepted in the United States of America have been
condensed or omitted. These condensed consolidated financial statements should
be read in conjunction with the consolidated financial statements and notes
thereto included in the Company's Form 10-K annual report for 2005 filed with
the Securities and Exchange Commission.


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


The results of operations for the three-month periods ended March 25, 2006 and
March 19, 2005 are not necessarily indicative of the results to be expected for
the full year.


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


                                    March 25,      March 19,    December 31,
     (All amounts in thousands)       2006           2005           2005

     Raw materials                $      8,754   $      8,570   $      7,128
     Work in progress                    6,452          6,128          5,358
     Finished goods                     21,378         21,353         20,563
                                  ------------   ------------   ------------
                                  $     36,584   $     36,051   $     33,049
                                  ============   ============   ============


Note D - Income Taxes
--------------------------------------------------------------------------------

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

Note E - Restructuring Costs
--------------------------------------------------------------------------------

In 2004 the Company initiated a facility consolidation plan and involuntary
employee terminations in the Office Products segment in order to reduce costs
and increase the competitiveness of the Company. Under these plans no additional
costs were incurred during the quarter ended March 25, 2006. Liabilities under
these plans are as follows:

<TABLE>
<CAPTION>
                                   Balance at                                   Balance at
     (All amounts in thousands)    December 31,     Non-Cash         Cash        March 25,
                                       2005         Charges        Payments        2006
<S>                                <C>            <C>            <C>            <C>
     Severance and benefit costs   $        199   $         --   $         51   $        148
     Facility closure costs                  --             --             --             --
                                   ------------   ------------   ------------   ------------
                                   $        199   $         --   $         51   $        148
                                   ============   ============   ============   ============
</TABLE>

                                       7
<PAGE>

Note F - Dividend Payment

On March 24, 2006, the Company paid a dividend of $0.20 per common share to all
shareholders of record on March 17, 2006. The total amount of the dividend was
approximately $2.6 million and was charged against retained earnings.

Note G - Earnings Per Share
--------------------------------------------------------------------------------

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

                                                    3 Months Ended
                                           -------------------------------
                                              March 25,      March 19,
     All amounts in thousands                    2006           2005
     ---------------------------------------------------------------------

     Weighted average common shares
           outstanding                             12,979         13,058
     Dilutive effect of stock options                  59            174
                                             ------------   ------------
     Weighted average common shares
           outstanding, assuming dilution          13,038         13,232
                                             ============   ============

     Number of anti-dilutive stock options            621            178


Note H - Employee Stock Option Plan
--------------------------------------------------------------------------------

The Company has two stock-based compensation plans. Prior to the start of the
current fiscal year, the Company accounted for these plans under the recognition
and measurement principles of APB Opinion No. 25, Accounting for Stock issued to
Employees, and related interpretations. Beginning with the current fiscal year,
the Company expenses the fair value of options to employee compensation expense
in accordance with SFAS 123R Share-Based Payment (SFAS 123R). During the three
months ended March 25, 2006, the Company recorded compensation expense of $130
thousand.

The following table illustrates the effect on net income and earnings per share
had the Company applied the fair value provisions of FASB Statement No. 123,
Accounting for Stock-Based Compensation, to stock-based employee compensation
for the three months ended March 19, 2005.


     (In Thousands Except Per Share Amounts)                   March 19, 2005
                                                                 (Restated)
     --------------------------------------------------------------------------

     Net income, as reported                                   $        1,238
     Less:  Total stock-based employee
     compensation cost determined under
     the fair value based method, net of
     income taxes                                                        (279)
                                                               --------------

     Pro forma net income                                      $          959
                                                               ==============


     Earnings per share
         Basic--as reported                                    $         0.09
                                                               ==============
         Basic--pro forma                                      $         0.07
                                                               ==============

         Diluted--as reported                                  $         0.09
                                                               ==============
         Diluted--pro forma                                    $         0.07
                                                               ==============

                                       8
<PAGE>

Note I - Acquisition
--------------------------------------------------------------------------------

On February 27, 2006, the Company purchased substantially all of the assets of
Family Industries, Inc., which manufactures and sells premium quality
residential play sets made from stained redwood. These play sets are sold under
the Woodplay brand name, primarily through specialty dealers. The total purchase
price of $7.1 million included accounts receivable and inventory valued at $2.9
million, the assumption of certain liabilities, and goodwill totaling $4.4
million. The Company financed the acquisition using its revolving credit lines.
Combined with the acquisition of the ChildLife product line in the first quarter
of fiscal 2005, this acquisition enhances the Company's product offerings in the
residential play set market.

Note J - Segment Information
--------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                        As of and for the Three Months
                                                        Ended March 25, 2006 (Restated)
                                      --------------------------------------------------------------
                                          Sporting          Office
      In thousands                         Goods           Products        Corp.           Total
     -----------------------------------------------------------------------------------------------
<S>                                     <C>             <C>            <C>             <C>
     Revenues from external customers   $     19,884    $     12,916   $         --    $     32,800
     Operating income(loss)                      525           2,414           (592)          2,347

     Net income                                   50           1,584             90           1,724
     Total assets                       $     74,150    $     42,305   $     11,556    $    128,011



                                                        As of and for the Three Months
                                                        Ended March 19, 2005 (Restated)
                                      --------------------------------------------------------------
                                          Sporting          Office
      In thousands                         Goods           Products        Corp.           Total
     -----------------------------------------------------------------------------------------------

     Revenues from external customers   $     14,021    $     15,761   $         --    $     29,782
     Operating income(loss)                       43           2,129           (424)          1,748

     Net income (loss)                          (111)          1,341              8           1,238
     Total assets                       $     58,979    $     54,817   $     14,207    $    128,003
</TABLE>

Note K - Restatement of Financial Statements

The consolidated financial statements for the three months ended March 25, 2006
and March 19, 2005 and for the year ended December 31, 2005, have been restated.
On February 13, 2007, the Audit Committee of the Company's Board of Directors,
upon the recommendation of management and in consultation with the Company's
registered public accounting firm, decided to restate these financial statements
to correct the overstatements of the provision for income taxes and employee
benefit costs.

The following tables set forth the effects of the restatement on the Company's
previously reported statements of income for the three months ended March 25,
2006 and March 19, 2005:


                                       9
<PAGE>


<TABLE>
<CAPTION>
(Amounts in thousands, except per share amounts)                         Three months ended March 25, 2006
                                                       --------------------------------------------------------------
                                                           As Previously                                    As
                                                              Reported            Adjustments            Restated
---------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                    <C>                 <C>
Provision for income taxes                                        664                   (360)                304
Net income                                                      1,364                    360               1,724
Basic earnings per share                                        $0.11                  $0.02               $0.13
Diluted earnings per share                                      $0.10                  $0.03               $0.13



<CAPTION>


(Amounts in thousands, except per share amounts)                         Three months ended March 19, 2005
                                                       --------------------------------------------------------------
                                                           As Previously                                    As
                                                              Reported            Adjustments            Restated
---------------------------------------------------------------------------------------------------------------------
<S>                                                             <C>                    <C>                 <C>
Provision for income taxes                                        553                    (84)                469
Net income                                                      1,154                     84               1,238
Basic earnings per share                                        $0.09                  $0.00               $0.09
Diluted earnings per share                                      $0.09                  $0.00               $0.09


The following tables set forth the effect of the restatement on the consolidated
balance sheet as of March 25, 2006 and March 19, 2005:
<CAPTION>

(Amounts in thousands)                                                         As of March 25, 2006
                                                       --------------------------------------------------------------
                                                           As Previously                                    As
                                                              Reported            Adjustments            Restated
---------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                      <C>               <C>
Deferred income tax benefit                                     1,719                   (436)              1,283
Income tax receivable                                              --                  1,132               1,132
Total current assets                                           68,315                    696              69,011
Total Assets                                                  127,315                    696             128,011
Accrued Liabilities                                            18,969                   (699)             18,270
Income tax payable                                                994                   (994)                 --
Total current liabilities                                      25,983                 (1,693)             24,290
Total liabilities                                              53,377                 (1,693)             51,684
Retained earnings                                              59,717                 (2,389)             62,106
Total stockholder's equity                                     73,938                 (2,389)             76,327


<CAPTION>
(Amounts in thousands)                                                        As of March 19, 2005
                                                       --------------------------------------------------------------
                                                           As Previously                                    As
                                                              Reported            Adjustments            Restated
---------------------------------------------------------------------------------------------------------------------
<S>                                                           <C>                     <C>                <C>
Deferred income tax benefit                                     2,154                   (434)              1,720
Income tax receivable                                              --                    123                 123
Total current assets                                           77,910                   (311)             77,599
Total Assets                                                  128,314                   (311)            128,003
Accrued Liabilities                                            21,205                   (657)             20,548
Income tax payable                                                793                   (793)                 --
Total current liabilities                                      27,865                 (1,450)             26,415
Total liabilities                                              59,714                 (1,450)             58,264
Retained earnings                                              51,560                 (1,139)             52,699
Total stockholder's equity                                     68,600                 (1,139)             69,739
</TABLE>

The restatement had no effect on net cash provided by operating activities for
the three months ended March 25, 2006 and March 19, 2005. The following tables
set forth the effect on the individual line items within operating activities in
the consolidated statement of cash flows for the three months ended March 25,
2006 and March 19, 2005:


                                       10
<PAGE>


<TABLE>
<CAPTION>
                                               For the three months ended March 25, 2006
                                             As Previously                        As
(Amounts in thousands)                          Reported        Adjustments     Restated
------------------------------------------------------------------------------------------
<S>                                               <C>               <C>           <C>
Net Income                                        1,364             360           1,724
Adjustments necessary to
reconcile net income to net
cash provided by operating
activities:                                        (125)           (360)           (485)


                                               For the three months ended March 19, 2005
                                             As Previously                        As
(Amounts in thousands)                          Reported        Adjustments     Restated
------------------------------------------------------------------------------------------
Net Income                                        1,154              84           1,238
Adjustments necessary to
reconcile net income to net
cash provided by operating
activities:                                       1,802             (84)          1,718
</TABLE>


Item 1A.  Not Required.

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 commanding market presence in
niche markets. This strategy is heavily dependent on brand recognition and
excellent customer service. Management believes the key indicators in measuring
the success of this strategy are revenue and earnings growth. A key strategic
advantage is the Company's established relationships with major customers that
allow the Company to bring new products to the market in a very cost effective
manner while maintaining a diversified product line and wide customer base. In
addition to strategic customer relations, the Company has over 75 years of
manufacturing experience that enable it to be a low cost supplier.

Results of Operations


Consolidated net sales and net income increased 10% and 39%, respectively, for
the first quarter of 2006, compared to the same quarter last year. The increase
in profitability is principally due to increased sales in the Sporting Goods
business segment and improved gross margins in both the Sporting Goods and


                                       11
<PAGE>

Office Products business segments.

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

                                                    Three months ended
                                                 March 25,       March 19,
                                                   2006            2005
        ------------------------------------------------------------------------
         Net revenue                                  100.0%          100.0%
         Cost of products sold                         67.2%           70.0%
                                               ------------    ------------
         Gross margin                                  32.8%           30.0%
         Selling, administrative and general
             expenses                                  25.6%           24.1%
                                               ------------    ------------
         Operating income                               7.2%            5.9%
                                               ============    ============


Consolidated Revenue and Gross Margin

Compared to the same quarter last year, revenues in the Sporting Goods business
were 41.8% higher in 2006, while the Office Products business was down 18.0%.

Sporting Goods sales in the first quarter were up primarily due to increased
sales to sporting goods chains as a direct result of the introduction of glass
backboards for the Company's premier in-ground basketball systems. Sales into
the mass market channel, which includes large mass market retailers and sporting
goods chain stores, were up 45% for the quarter compared to the same period last
year with basketball sales comprising 76% of this increase. Sales in the
specialty market, which includes dealers and specialty retailers, were up 28%
primarily due to higher sales of playground systems which accounted for 77% of
the increase. Product placement for the 2006 fall and Christmas programs is
still being negotiated with our retail customers. Based on preliminary results,
the Company expects to have increased placement in 2006 and Management is
optimistic that this will result in higher sales in the mass market channel. The
Company continues to focus on diversifying its customer base and product
offerings by focusing on the specialty channel. The recent acquisition of the
Woodplay product line, a premium residential playground system made of wood, is
part of that strategy.

Approximately 38% of the decline in Office Product sales relates to products and
customers rationalized in 2005 because they were non-core, low margin or
unprofitable. In addition, changes in foreign exchange rates negatively impacted
office product sales and account for approximately 24% of the sales decline. The
balance of the decline is related to the Company's data shredder sales which are
down 21% compared to the same period last year primarily due to stiff price
competition. During the first quarter of 2006, the Company introduced a new line
of data shredders that Management believes will increase sales and profitability
through competitive pricing and product cost reduction. However, Management is
not optimistic that this will offset the declines related to rationalized
products and foreign currency changes. Accordingly, Management anticipates that
Office Product sales in 2006 will be lower than 2005, but profitability will be
higher barring any further sales declines or adverse foreign exchange movements.

Management's strategy of rationalizing unprofitable products and customers in
the Office Products business segment resulted in improved gross margin ratios
during the current quarter compared to last year. Product mix changes in the
Sporting Goods business, a higher percentage of basketball and playground system
sales, also contributed to the higher gross margin. Management believes that the
gross margin ratios achieved in the first quarter can be maintained through the
balance of fiscal 2006.

                                       12
<PAGE>

Consolidated Selling, General and Administrative Expenses

Consolidated selling, general and administrative expenses in the first quarter
increased 17% compared to the same quarter last year. Approximately half of this
increase is attributed to new basketball display units associated with the glass
backboards introduced in 2006. Display units are usually replaced every three
years, or whenever a major product is introduced. Another large component of the
increase in selling, general and administrative expenses is associated with
one-time relocation costs related to the Company's new manufacturing plant in
Reynosa, Mexico. Management expects these costs to be recouped in the form of
lower manufacturing costs during the second half of 2006. The Company has
identified a number of cost reduction opportunities in each of its business
segments and is actively implementing these. However, these cost reductions will
come slowly and are not expected to materially impact fiscal 2006.

Financial Condition and Liquidity

The Company continues to exhibit very strong financial health. Current assets
are down from the same period last year reflecting the Company's continued
emphasis on accounts receivable collection efforts and inventory control. Total
debt increased in the first quarter of 2006 to accommodate the acquisition of
the Woodplay product line from Family Industries, Inc. The following schedule
summarizes the Company's total debt:

                                       March 25,      March 19,     December 31,
In thousands                             2006           2005           2005
--------------------------------------------------------------------------------

Notes payable short-term             $          5   $         --   $         --
Current portion long-term debt                906            354          1,066
Long term debt                             26,016         30,589         18,487
                                     ------------   ------------   ------------
Total debt                           $     26,927   $     30,943   $     19,553
                                     ============   ============   ============


As a percentage of stockholders' equity, total debt decreased from 44.4% at
March 19, 2005, to 35.3% at March 25, 2006.


During the first quarter of 2006, operations generated $2.3 million in cash
which was used to fund, in part, the payment of a cash dividend to shareholders
of approximately $2.6 million and purchase equipment; primarily for the new
manufacturing facility in Reynosa, Mexico which has now been completed and
commenced operations in the second quarter of 2006.

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 2005. 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

                                       13
<PAGE>

reductions in value and the volatility of future cash flows caused by changes in
currency exchange rates, the Company carefully considers the use of transaction
and balance sheet hedging programs. Such programs reduce, but do not entirely
eliminate, the impact of currency exchange rate changes. Presently the Company
does not employ currency exchange hedging financial instruments, but has
adjusted transaction and cash flows to mitigate adverse currency fluctuations.
Historical trends in currency exchanges indicate that it is reasonably possible
that adverse changes in exchange rates of 20% for the Euro could be experienced
in the near term. Such adverse changes would not have resulted in a material
impact on income before taxes for the three months ended March 25, 2006.

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

An adverse movement of equity market prices would have an impact on the
Company's long-term marketable equity securities that are included in other
assets on the consolidated balance sheet. At March 25, 2006 the aggregate
carrying value of long-term marketable equity securities was $3.4 million. Due
to the unpredictable nature of the equity market the Company has not employed
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 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. In connection
with the restatement discussed above in the explanatory note to this Form 10-Q/A
and in Note K to our financial statements, the Company's Chief Executive Officer
and Chief Financial Officer reevaluated the Company's disclosure controls and
procedures and concluded that such controls and procedures were not effective as
of March 25, 2006 because of a material weakness in internal control over
financial reporting relating to errors in calculating the provision for income
taxes.


                                       14
<PAGE>

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 2006.


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
2006 through March 25, 2006 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 2. (c) ISSUER PURCHASES OF EQUITY SECURITIES

<TABLE>
<CAPTION>

-------------------------------------------------------------------------------------------------------
                                                                                   (d) Maximum Number
                                                                                    (or Approximate
                                                                (c) Total Number    Dollar Value) of
                                   (a) Total                      of Shares (or     Shares (or Units)
                                   Number of                   Units) Purchased as    that May Yet Be
                                     Shares     (b) Average      Part of Publicly    Purchased Under
                                   (or Units)  Price Paid per    Announced Plans        the Plans
Period                             Purchased   Share (or Unit)     or Programs         or Programs
-------------------------------------------------------------------------------------------------------
<S>                                  <C>           <C>                <C>              <C>
Shares purchases prior to
    12/31/2005 under the
    current repurchase program.      449,964       $9.38              449,964          $ 3,000,000
-------------------------------------------------------------------------------------------------------

First quarter purchases:
-------------------------------------------------------------------------------------------------------
01/01/2006 - 01/28/2006                 None        None                 None                 None
-------------------------------------------------------------------------------------------------------
01/29/2006 - 02/25/2006                 None        None                 None                 None
-------------------------------------------------------------------------------------------------------
02/26/2006 - 03/25/2006                 None        None                 None                 None
-------------------------------------------------------------------------------------------------------

Total share purchases under the
    current program                  449,964       $9.38              449,964          $ 3,000,000
-------------------------------------------------------------------------------------------------------
</TABLE>

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

                                       15
<PAGE>

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:  March 9, 2007                       /s/ DANIEL A. MESSMER
       --------------                      -------------------------------------
                                           Daniel A. Messmer
                                           President and Chief Executive Officer



Date:  March 9, 2007                       /s/ TERRY D. FRANDSEN
       --------------                      -------------------------------------
                                           Terry D. Frandsen
                                           Vice President and
                                           Chief Financial Officer


                                       16