Financial Analysis

Note L Commitments and Contingencies The Company is involved in litigation arising in the normal course of its business, but the Company does not believe the disposition or ultimate resolution of such claims or lawsuits will have a material adverse effect on the business or financial condition of the Company. Based on current information, available insurance coverage and established reserves, the Company believes that the eventual outcome of existing litigation against the Company will not, individually or in the aggregate, have a material adverse effect on the Companys consolidated financial position. However, in the event of unexpected future developments, it is possible that the ultimate resolution of those matters, if unfavorable, may be material to the Companys results of operations for any particular period, depending, in part, upon the size of the loss or liability imposed and the operating results for the applicable period. Tariff Refunds During fiscal 2025 and early fiscal 2026, the Company incurred import duties under tariffs imposed pursuant to the International Emergency Economic Powers Act (IEEPA). On February 20, 2026, the U.S. Supreme Court ruled that such tariffs were not authorized, and on March 4, 2026, the U.S. Court of International Trade (CIT) ordered U.S. Customs and Border Protection to refund certain tariffs collected under IEEPA. The Company identified certain potential refunds of previously paid tariffs in accordance with the ruling by the CIT and we …

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Note M Debt On October 11, 2024, the Company entered into the Fifth Amendment (the Fifth Amendment) to its Amended and Restated Credit Agreement with its issuing bank, JPMorgan Chase Bank, N.A. and the other lenders identified therein (the Restated Credit Agreement). The Fifth Amendment eliminated the fixed charge coverage ratio covenant and related provisions. The fixed charge ratio covenant was replaced by a new minimum interest coverage ratio covenant of 3.50 to 1:00 effective September 30, 2024. Under the terms of the Fifth Amendment, the Company and the Lender also agreed to decrease the maximum availability under the senior revolving credit facility from $75.0 million to $60.0 million, but added an accordion feature that could increase the facility in an amount not to exceed $85.0 million. The Fifth Amendment further revised the restricted payments covenant to provide that if at any time the Companys Funded Debt to EBITDA Ratio would exceed 1.75 to 1.0, then the aggregate combined total of cash dividends and Company share repurchases may not exceed $12.0 million in any trailing twelve month period. The Company was in compliance with the debt covenants set forth in the Restated Credit Agreement as of June 30, 2026. As of June 30, 2026, the outstanding principal amount of the term loan was $14.9 million and total amount drawn under the revolving facility was zero . The term loan and revolving facility have a maturity date of January 21, 2027. …

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Three Months Ended Six Months Ended All Amounts in Thousands June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Gross Sales by Channel: Mass Merchants $ 16,702 $ 17,332 $ 34,486 $ 37,510 Specialty Dealers 18,568 17,644 41,568 38,211 E-commerce 24,853 22,500 41,641 38,764 International 3,328 2,792 5,813 6,490 Other 843 845 1,634 1,646 Total Gross Sales 64,294 61,113 125,142 122,621 Less: Gross-to-Net Sales Adjustments Returns 1,625 1,547 2,646 3,087 Warranties 130 159 381 532 Customer Allowances 4,837 5,074 8,628 9,190 Total Gross-to-Net Sales Adjustments 6,592 6,780 11,655 12,809 Total Net Sales $ 57,702 $ 54,333 $ 113,487 $ 109,812

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Note E Stock Compensation The fair value of stock-based compensation is recognized in accordance with the provisions of FASB ASC 718, Stock Compensation . For the three and six months ended June 30, 2026, the Company recognized stock based compensation expense of $463 thousand and $875 thousand, respectively, compared to stock based compensation expense of $495 thousand and $962 thousand for the same periods in the prior year. At June 30, 2026 and June 30, 2025, there was $2.3 million and $2.8 million, respectively, in unrecognized stock-based compensation expense related to non-vested stock awards. The unrecognized compensation expense of unvested restricted stock awards not yet recognized as of June 30, 2026 is expected to be recognized over the weighted average period of 1.5 years. During the six months ended June 30, 2026, the Company awarded 20,000 restricted stock units to directors and 116,691 restricted stock units to employees. The restricted stock units awarded to directors time vest over two years ( one -half one year from grant date and one -half two years from grant date) provided that the director is still a director of the Company at the vest date. Director restricted stock units are subject to forfeiture, except for termination of services as a result of retirement, death or disability, if on the vesting date the director no longer holds a position with the Company. All of the 2026 restricted stock units awarded to employees time vest over three years ( one -t …

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Note D Fair Values of Financial Instruments Accounting Standard Codification (ASC) 820, Fair Value Measurement and Disclosures, outlines a valuation framework and creates a fair value hierarchy for assets and liabilities as follows: - Level 1: Observable inputs such as quoted prices in active markets; - Level 2: Inputs other than quoted prices in active markets that are either directly or indirectly observable; and - Level 3: Unobservable inputs for which little or no market data exists, therefore requiring the Company to develop its own assumptions. Due to their short-term nature, the fair value of cash and cash equivalents, accounts receivable, accounts payable and certain other liabilities approximated their carrying values at June 30, 2026, December 31, 2025 and June 30, 2025. The Company believes the carrying value of borrowings under our senior secured revolving credit facility, due to variable rate interest, adequately reflects the fair value of these instruments. The Company discloses the fair value of its term loan using Level 2 inputs, which are estimated using treasury rates for a similar instrument, as follows: June 30, 2026 December 31, 2025 June 30, 2025 In thousands Carrying Value Fair Value Carrying Value Fair Value Carrying Value Fair Value Term Loan Facility $ 14,881 $ 14,510 $ 18,452 $ 17,689 $ 22,024 $ 20,744 …

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Note N Provision for Taxes The effective tax rate for the three months ending June 30, 2026 was 22.7% compared to 25.8% for the same three month period last year. The effective tax rate for the first six months ending June 30, 2026 was 23.0% compared to 24.7% for the same period last year. The effective tax rate for the three and six months ending June 30, 2026 decreased primarily due to refinements to expected state apportionment factors, which reduced state income tax expense. …

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Note K Leases We have operating leases for office, manufacturing and distribution facilities as well as for certain equipment. Our leases have remaining lease terms of 1 year to 5 years. As of June 30, 2026, the Company has not entered into any lease arrangements classified as a finance lease. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease right-of-use (ROU) assets, current operating lease liabilities and operating lease liabilities on our consolidated balance sheet. The Company has elected an accounting policy to not recognize short-term leases (one year or less) on the balance sheet. The Company also elected the package of practical expedients which applies to leases that commenced before the adoption date. By electing the package of practical expedients, the Company did not need to reassess the following; whether any existing contracts are or contain leases, the lease classification for any existing leases and initial direct costs for any existing leases. ROU assets and operating lease liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date. When the implicit rate of the lease is not provided or cannot be determined, we use our incremental borrowing rate based on the information available at the commencement date to determine the present value of future payments. Lease terms may include options to extend or terminate the lease and are recognized …

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Note J Revenue from Contracts with Customers Revenue Recognition Revenue is recognized when a contract exists with a customer that specifies the goods to be provided at an agreed upon sales price and when the performance obligations under the terms of the contract are satisfied; generally this occurs with the transfer of control of our goods at a point in time based on shipping terms and transfer of title. Sales are made on normal and customary short-term credit terms or upon delivery of point-of-sale transactions. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods. The Company expenses incremental costs of obtaining a contract due to the short-term nature of the contracts. These costs are recorded in selling, general and administrative expenses in the accompanying consolidated statements of operations. Sales, value add, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. Shipping and handling fees charged to customers are reported within revenue. The Company enters into contractual arrangements with customers in the form of customer orders that specify goods, quantity, pricing, and associated order terms. The Company does not have long-term contracts that are satisfied over time. Due to the nature of the contracts, no significant judgment exists in relation to the identification of the customer contract, satisfaction of the performance obligations, or transaction price. Gro …

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Note F - Segment Information The Company operates as one operating segment. The Companys chief operating decision maker (CODM) is its president and chief executive officer, who reviews financial information presented on a consolidated basis. The CODM uses consolidated net sales and consolidated net income to assess financial performance and allocate resources. Reconciliation to net income: Three Months Ended Six Months Ended In Thousands June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Net Sales Sporting Goods $ 57,702 $ 54,333 $ 113,487 $ 109,812 Total Net Sales $ 57,702 $ 54,333 $ 113,487 $ 109,812 Sporting Goods Segment Operating Expenses: Cost of products sold $ 42,588 $ 40,896 $ 81,224 $ 81,585 Other operating expenses 2,379 10,205 12,912 20,519 Unallocated corporate expense 801 611 1,582 1,435 Total Operating Income $ 11,934 $ 2,621 $ 17,769 $ 6,273 Sporting Goods Segment Other Income (Expense): Interest expense (176 ) (213 ) (364 ) (457 ) Interest income 426 -- 500 -- Other income 18 51 31 82 Total Income Before Income Taxes $ 12,202 $ 2,459 $ 17,936 $ 5,898 Sporting Goods Segment provision for income taxes 3,573 844 5,363 2,016 Unallocated benefit for taxes (802 ) (210 ) (1,239 ) (562 ) Total Net Income $ 9,431 $ 1,825 $ 13,812 $ 4,444 Identifiable Assets Sporting Goods $ 217,195 $ 207,144 $ 217,195 $ 207,144 Corporate 17,323 11,195 17,323 11,195 Total Identifiable Assets $ 234,518 $ 218,339 $ 234,518 $ 218,339 Other operating expenses primarily include selling …

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