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Note L - Commitments and Contingencies
9 Months Ended
Sep. 30, 2026
Notes to Financial Statements  
Commitments and Contingencies Disclosure [Text Block]

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 Company’s 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 Company’s 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.

 

Contractual Obligations

 

During the three months ended September 30, 2026, the Company entered into an agreement with STIGA Sports AB, extending the Company’s exclusive right and license to distribute and produce table tennis equipment under the brand name STIGA® for North America to 2034. As a result of this extension, the Company’s minimum payments under purchase, royalty and license agreements increased by a total of $3.7 million, to be paid in annual installments for calendar years 2030 through 2034.

 

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 account for such refunds under the loss recovery framework in accordance with ASC Topic 410 when recovery is considered probable and reasonably estimable.

 

During the three months ended September 30, 2026, the Company received and recorded $1.6 million in cash proceeds representing approval of these tariff refund claims. The Company recorded $0.1 million as a receivable within other current assets on the Consolidated Condensed Balance Sheets as of September 30, 2026. In total, the Company recognized tariff benefits in its Statements of Operations of $1.7 million during the three months ended September 30, 2026, of which $1.6 million was recorded in tariff recovery within operating income and $0.1 million was recorded as interest income. During the nine months ended September 30, 2026, the Company recognized $11.9 million of tariff benefits. Approximately $11.5 million was recorded in operating income and $0.4 million was recorded in interest income.