David Cohen

David Cohen, President and Chief Compliance Officer at Minerva Advisors, asked about the potential financial impact on Escalade if the Supreme Court's decision led to a refund of previously paid tariffs, and requested a specific numerical range for this potential refund.

Answer

Interim President and CEO Patrick Griffin confirmed that a potential tariff refund would be a meaningful number for Escalade, clarifying that while not all tariffs paid were tied to Section 301, the refundable amount was significant. He estimated the potential refund to be in the $4 million to $5 million range.

David Cohen from Minerva Advisors asked about the potential financial impact on Escalade if a Supreme Court decision leads to a refund of previously paid tariffs, inquiring if this would be a meaningful amount for the company. He then requested a specific numerical range for this potential refund.

Answer

Interim President and CEO Patrick Griffin confirmed that a tariff refund would be a meaningful amount for Escalade, though not all tariffs paid are tied to the specific tariffs in question. He estimated the potential refund to be in the $4 million-$5 million range.

David Cohen asked for quantification of the non-recurring expenses incurred in 2023 and 2024 to better understand the company's normalized profitability. He also questioned if the recent reduction in balance sheet leverage has altered the company's perspective on capital allocation priorities.

Answer

An executive, likely CEO Walt Laser, indicated that the one-time costs absorbed in 2024 were roughly comparable to the reported $3.9 million gain on sale. He also confirmed that with debt reduced, the company's capital allocation strategy has broadened to include share repurchases, having bought back $2.2 million in the quarter, in addition to its dividend, core business investment, and potential selective M&A.

David Cohen asked about Escalade's capital allocation priorities, noting that the company's net leverage is now below its stated target range. He questioned whether this might trigger a reconsideration of strategies like share repurchases or acquisitions.

Answer

CEO Walter Glazer acknowledged that net leverage is below the target 1.5x to 2.5x range and confirmed the immediate priority is to continue repaying high-cost variable rate debt. He stated that all capital allocation levers, including dividends, share repurchases, and opportunistic M&A, remain under consideration depending on available opportunities, though there are no immediate acquisition needs.