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Adams Golf Announces Year End 2009 Results
GlobeNewswire
2010-03-09
PLANO, Texas, March 9, 2010 (GLOBE NEWSWIRE) -- Adams Golf
(Nasdaq:ADGF) today reported net sales of $76.1 million for the year
ended December 31, 2009, as compared to $91.5 million for the year
ended December 31, 2008, a decrease of 17% year-over-year. Adams Golf
had a net loss of $12.2 million, or $1.82 per fully diluted share, for
the year ended 2009, as compared to a net loss of $1.5 million, or
$0.23 per fully diluted share, for the comparable period of 2008. The
net loss for the year ended December 31, 2009 includes a $5 million,
one time, charge to settlement expense resulting from the accrual of
the settlement of the class action lawsuit, which was taken during the
third quarter of 2009 and a non-recurring 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 of 2009. Excluding these charges, our net
loss for the year ended December 31, 2009 was $3.6 million.
The Company's aggregate cash and cash equivalents balance was $12.6
million as of December 31, 2009 as compared to $6.0 million as of
December 31, 2008.
"2009 was a challenging year for Adams Golf, and for the golf industry
at large," said Mr. Chip Brewer, CEO and President of Adams Golf.
"During the year, we faced a sharp decline in consumer discretionary
spending and a marked increase in competitive promotional activity. In
response, Adams Golf proactively restructured our fixed cost base to
match our estimation of market conditions going forward and
aggressively managed cash flow to protect our financial strength. We
feel we were successful in these efforts and thus ended the year in
position to resume profitable growth when market conditions inevitably
recover. During the year we also settled the shareholder lawsuit that
had been overhanging the company since 1999 and maintained or grew our
U.S. market share (according to Datatech our U.S. wood dollar share was
up approximately 16% during 2009 and our iron dollar share was down
approximately 1%). Additionally, we believe we further strengthened our
brand through periodic tour exposure and our sustained position as the
# 1 hybrid on the PGA, Nationwide and Champions tours. During the
second half of 2009, we also started to see signs of market conditions
stabilizing with the potential for a slow recovery during 2010. Our
revenues for the second half of 2009 were down only 3% year over year
and our financial performance (excluding the one time shareholder
lawsuit charge) was significantly improved year over year. We are also
pleased with the market response to our recent product introductions."
"The Idea a7 and a7 OS irons sets and hybrids and the Speedline Fast 10
drivers all won Gold designations in the 2010 Golf Digest Hot List
rankings and the Idea a7 OS iron sets were the category leader in
"Performance" in the super game improvement iron category," Mr. Brewer
concluded.
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 not 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, March 11, 2010, with Chip Brewer, CEO and President, and
Pamela High, Interim Chief Financial Officer, to review Adams' Full
Year 2009 financial results. For telephone access to the conference
call, dial (877) 485-3104 or (201) 689-8579 for international calls,
and request connection to the Adams Golf conference call. The
conference ID # is 342587.
About Adams Golf
Developing high-performance and technologically innovative golf
products is the cornerstone of Adams Golf. From 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.
The Adams Golf logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5031
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,
operate profitably and protect our financial condition, 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
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
ASSETS
December 31,
----------------------
2009 2008
---------- ----------
Current assets:
Cash and cash equivalents $ 12,562 $ 5,960
Trade receivables, net 13,136 14,743
Inventories, net 19,721 33,611
Prepaid expenses 378 908
Other current assets 22 29
---------- ----------
Total current assets 45,819 55,251
Property and equipment, net 934 1,210
Deferred tax asset, net -- non
current 10,228 10,228
Other assets 238 367
---------- ----------
$ 57,219 $ 67,056
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 5,479 $ 9,471
Accrued expenses and other
current liabilities 11,228 7,253
---------- ----------
Total current liabilities 16,707 16,724
Other liabilities 2 18
---------- ----------
Total liabilities 16,709 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;
7,387,309
and 6,909,866 shares issued
and 6,976,372 and 6,498,929
shares outstanding
at December 31, 2009 and 2008,
respectively 7 7
Additional paid-in capital 93,576 92,701
Accumulated other
comprehensive income 2,074 565
Accumulated deficit (50,393) (38,205)
Treasury stock, 410,937 common
shares at December 31, 2009
and
December 31, 2008, at cost (4,754) (4,754)
---------- ----------
Total stockholders' equity 40,510 50,314
---------- ----------
Commitments and contingencies $ 57,219 $ 67,056
========== ==========
ADAMS GOLF, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Years Ended December
31,
---------------------
2009 2008
---------- ---------
Net sales $ 76,139 $ 91,451
Cost of goods sold 53,714 53,981
---------- ---------
Gross profit 22,425 37,470
---------- ---------
Operating expenses:
Research and development
expenses 2,816 3,758
Selling and marketing
expenses 19,911 26,205
General and administrative
expenses 6,773 8,929
Settlement expense 5,000 --
---------- ---------
Total operating expenses 34,500 38,892
---------- ---------
Operating income/(loss) (12,075) (1,422)
Other income (expense):
Interest income 8 122
Interest expense (87) (100)
Other 34 (63)
---------- ---------
Income/(loss) before
income taxes (12,120) (1,463)
Net income tax expense
(benefit) 68 (4)
---------- ---------
Net income/(loss) $ (12,188) $ (1,459)
========== =========
Income/(loss) per common
share:
Basic $ (1.82) $ (0.23)
========== =========
Diluted $ (1.82) $ (0.23)
========== =========
CONTACT: Adams Golf
Pamela High, Interim Chief Financial Officer
(972) 673-9000
InvestorInfo@adamsgolf.com
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