PLANO, Texas, Nov. 10, 2009 (GLOBE NEWSWIRE) -- Adams Golf (Nasdaq:ADGF) today reported net sales of $17.4 million for the three months ended September 30, 2009, as compared to $17.7 million for the three months ended September 30, 2008, a decrease of 2% year-over-year. Adams Golf had a net loss of $5.5 million, or $0.82 per fully diluted share, for the third quarter 2009, as compared to a net loss of $1.2 million, or $0.18 per fully diluted share, for the comparable period of 2008. The net loss for the three months ended September 30, 2009 includes a $5 million, one time, charge to settlement expense resulting from the accrual of the settlement of the class action lawsuit. Excluding the settlement expense, our net loss for the quarter was $0.5 million, or $0.06 per fully diluted share, an improvement of $0.75 per fully diluted share compared to the same period during 2008.
The Company reported net sales of $64.1 million for the nine month period ended September 30, 2009, compared to net sales of $79.0 million for the comparable period of 2008, a decrease of 19%. The Company reported a net loss of $10.3 million, or $1.55 per diluted share, for the nine month period ended September 30, 2009, compared to net income of $1.2 million, or $0.16 per share, for the comparable period of 2008. In addition to the $5 million settlement expense incurred this quarter, year to date net loss also includes the one time charge to cost of goods sold of $3.6 million for the write-down of products to the lower of cost or market and the increase to the inventory obsolescence reserve taken during the second quarter this year. Excluding these charges, our net loss for the year is $1.7 million.
"Although market conditions continue to be difficult, we were pleased with our performance during the third quarter," said Mr. Chip Brewer, CEO and President of Adams Golf. "In total our third quarter revenues were almost flat year over year and domestically they were up 2%. These results compare very favorably with industry data. Q3 revenues were driven by new product introductions, including the Idea a7 and a7os irons and the Speedline 9032 drivers and fairway woods. Market feedback on these new products has been positive. Furthermore our expenses continue to reflect our cost management efforts with total operating expenses down 15% year over year. Additionally, we had excellent cash flows during the quarter. We ended the quarter at $11.4 million in cash along with a strong balance sheet overall."
"On the non-financial side we continue to be pleased with the development of our brand and our market positions. According to Datatech, during Q3 we grew both our woods and irons dollar market shares, these ended the quarter at 5.3% and 8.6% respectively. We also continued to benefit from periodic tour exposure and continued our position as the # 1 hybrid on the PGA, Nationwide and Champions tours. In addition, our Speedline 9032 driver swept the Re-Max World Long Drive Championship titles when it was played by the open division champion, Adams Golf staff player Jamie Sadlowski, as well as the individual who won both the Senior and Super Senior titles. We believe these accomplishments help strengthen our brand and create the opportunity for shareholder value going forward."
Use of Non-GAAP Financial Information
This press release includes adjusted earnings and earnings per share financial measure that have not been calculated in accordance with generally accepted accounting principles, or GAAP. These non-GAAP financial measures exclude certain items that are included in our earnings calculated in accordance with GAAP and they are not meant to be considered in isolation or as a substitute for the comparable GAAP measure. There are limitations to these non-GAAP financial measures because they are prepared in accordance with GAAP and may not be comparable to similarly titled measures of other companies due to potential differences in methods of calculation and items being excluded. Management believes that the presentation of such non-GAAP financial measures, when considered in conjunction with the most directly comparable GAAP financial measures, provides additional useful information for investors as to the underlying performance of our business without regard to one time, non-recurring charges. The non-GAAP financial measures should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.
Conference Call
Adams Golf will host a conference call at 4:30 p.m. Eastern time on Thursday, November 12, 2009, with Chip Brewer, CEO and President, and Pamela High, Interim Chief Financial Officer, to review Adams' Q3 2009 financial results. For telephone access to the conference call, dial (877) 407-4134 or (201) 689-8430 for international calls, and request connection to the Adams Golf conference call. The conference ID # is 336979.
About Adams Golf
Developing high-performance and technologically innovative golf products is the cornerstone of Adams Golf. From the initial design, through manufacturing and servicing, Adams Golf is committed to helping golfers of all abilities enjoy the game of golf. For more information on Adams Golf, please visit www.adamsgolf.com or view prior press releases at http://www.adamsgolf.com/news.htm.
Forward-Looking Statements
This press release contains "forward-looking statements" made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The statements include, but are not limited to, statements regarding our ability to continue manufacturing products that are commercially acceptable to consumers, the global economic recession, our ability to formally settle the class action lawsuit (including the conditions thereto), and statements using terminology such as "may," "will," "expect," "intend," "estimate," "anticipate," "plan," "seek," "inevitably," "appears," or "believe". Such statements reflect the current view of Adams Golf with respect to future events and are subject to certain risks, uncertainties and assumptions related to certain factors including, without limitation, the following: the impact of changing economic conditions, our ability to further reduce fixed costs; product development difficulties; product approval and conformity to governing body regulations; assembly difficulties; competing product introductions; patent infringement risks; uncertainty of our ability to protect our intellectual property rights; market demand and acceptance of products; the success of our marketing strategy; our dependence on a limited number of customers; business conditions in the golf industry; reliance on third parties, including suppliers; the actions of competitors, including pricing, advertising and product development risks concerning future technology; the management of sales channels and re-distribution; and one-time events and other factors detailed under "Risk Factors" in our 10-K's, 10-Q's and other Securities and Exchange Commission filings. These filings can be obtained by contacting Adams Golf Investor Relations.
Although Adams Golf believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein. Except as required by federal securities laws, Adams Golf undertakes no obligation to publicly update or revise any written or oral forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this press release. All subsequent written and oral forward-looking statements attributable to Adams Golf or persons acting on its behalf are expressly qualified in their entirety by the applicable cautionary statements.
ADAMS GOLF, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share amounts)
ASSETS
September 30, December 31,
2009 2008
------------- -------------
(unaudited)
Current assets:
Cash and cash equivalents $ 11,407 $ 5,960
Trade receivables, net of
allowance for doubtful accounts
of $1,537 (unaudited) and
$1,321 in 2009 and 2008,
respectively 16,250 14,743
Inventories, net 20,610 33,611
Prepaid expenses 455 908
Other current assets 190 29
------------- -------------
Total current assets 48,912 55,251
Property and equipment, net 1,027 1,210
Deferred tax asset - non current 10,228 10,228
Other assets, net 277 367
------------- -------------
$ 60,444 $ 67,056
------------- -------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 7,101 $ 9,471
Accrued expenses 11,423 7,253
Other current liabilities 17 --
------------- -------------
Total current liabilities 18,541 16,724
Other liabilities 6 18
------------- -------------
Total liabilities 18,547 16,742
Stockholders' equity:
Preferred stock, $0.01 par value;
authorized 1,250,000 shares;
none issued -- --
Common stock, $.001 par value;
authorized 12,500,000 shares;
7,108,679 and 6,909,866 shares
issued and 6,697,742 and
6,498,929 shares outstanding at
September 30, 2009 (unaudited)
and December 31, 2008,
respectively 7 7
Additional paid-in capital 93,351 92,701
Accumulated other comprehensive
income 1,808 565
Accumulated deficit (48,515) (38,205)
Treasury stock, 410,937 common
shares at September 30, 2009
and December 31, 2008, at cost (4,754) (4,754)
------------- -------------
Total stockholders' equity 41,897 50,314
------------- -------------
$ 60,444 $ 67,056
------------- -------------
ADAMS GOLF, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------------------
2009 2008 2009 2008
--------- --------- --------- ---------
Net sales $ 17,385 $ 17,700 $ 64,115 $ 78,961
Cost of goods sold 11,056 10,937 45,999 46,351
--------- --------- --------- ---------
Gross profit 6,329 6,763 18,116 32,610
Operating expenses:
Research and develop-
ment expenses 610 889 2,201 2,768
Selling and marketing
expenses 4,548 4,938 15,936 21,718
General and
administrative
expenses 1,614 2,096 5,199 6,846
Settlement expense 5,000 -- 5,000 --
--------- --------- --------- ---------
Total operating
expenses 11,772 7,923 28,336 31,332
--------- --------- --------- ---------
Operating income
(loss) (5,443) (1,160) (10,220) 1,278
--------- --------- --------- ---------
Other income (expense):
Interest income
(expense), net (19) 6 (71) (14)
Other income
(expense), net (5) (9) 45 (60)
--------- --------- --------- ---------
Income (loss) before
income taxes (5,467) (1,163) (10,246) 1,204
Income tax expense 4 -- 64 16
--------- --------- --------- ---------
Net income (loss) $ (5,471) $ (1,163) $ (10,310) $ 1,188
--------- --------- --------- ---------
Net income (loss)
per common share
-- basic $ (0.82) $ (0.18) $ (1.55) $ 0.19
--------- --------- --------- ---------
-- diluted $ (0.82) $ (0.18) $ (1.55) $ 0.16
--------- --------- --------- ---------