Adams Golf Sales Grow Double-Digits for Q4 and Full Year

Adams Golf saw net sales jump 24% to $94.6 million for the year ended December 31, 2007, from $76.0 million for the year ended December 31, 2006. The company reported net income of $9.4 million, or $1.32 per fully diluted share (adjusted for the February 19, 2008 1-for-4 reverse split) for 2007, compared to net income of $9.0 million, or $1.24 per fully diluted share (split adjusted) for 2006. In 2007, the company benefited from the recording of a deferred tax asset of $4.8 million, which brings the company’s total deferred tax asset on its balance sheet to $10.2 million. In 2006, the company benefited from the recording of a deferred tax asset of $5.4 million.
 
The company reported net sales of $17.5 million for the fourth quarter ended December 31, 2007, compared to $13.1 million for the comparable period of 2006, a gain of 34% year-over-year. The company reported net income of $3.5 million, or 49 cents per fully diluted share (split adjusted) for the fourth quarter ended December 31, 2007, compared to net income of $4.4 million, or 61 cents per fully diluted share (split adjusted) for the comparable period of 2006. In the fourth quarter of 2007, the company recorded a deferred tax asset of $4.8 million, as noted above. In the fourth quarter of 2006, the company recorded a deferred tax asset of $5.4 million.

The company's aggregate cash and cash equivalents balance was $11.3 million as of December 31, 2007.

“During 2007,” Mr. Brewer continued, “we are confident that we have also successfully strengthened our brand positions. We continued to enjoy a leadership position on the Champions tour and our hybrid iron sets remain the top-selling and recognized leader in their category. Additionally, according to results from the Darrell Survey, our individual hybrids have been the #1 hybrid in play for two years running on the combined professional men's tours, which include the PGA, Champions and Nationwide tours. Year-to-date in 2008, our hybrids are ranked the # 1 played hybrid on the PGA Tour, the Nationwide Tour and the Champions tour. We believe we are gaining momentum on tour and that this will provide long-term value to the Company. During 2007, for the first time, independent consumer research found that consumers ranked Adams Golf as the industry leader in hybrid golf club technology. In addition, our products continue to be recognized by prominent golf media organizations; for example, our 2008 Insight XTD drivers and hybrid-fairway woods as well as our Idea a3 and a3OS hybrids and hybrid iron sets were all named to Golf Digest’s coveted 2008 Hot List.”

“To position the Company for long term viability, continued growth and enhanced long term profitability we made considerable investments in our business over the last twelve months. These include investments in our product development team, marketing and tour exposure. Among the most visible of these investments has been the signing of prominent PGA Tour players Aaron Baddeley and Rory Sabbatini, who are ranked 18th and 9th, respectively, in the current world rankings, to endorsement agreements aimed at broadening our brand appeal and exposure. These investments are consistent with our stated strategy of aggressively reinvesting in our brand and organizational resources in support of developing these assets and driving long-term earnings potential and the resulting shareholder value. We recognize and acknowledge that these investments may have a negative impact on profitability in the short term or until we are able to generate sufficient revenue growth to cover them. It’s our belief that these investments represent good long-term strategic decisions and that any short-term setback will be made up in long-term value,” Mr. Brewer concluded.