Adams Golf reported sales fell 17% in 2009, to $76.1 million from $91.5 million a year ago. Adams Golf had a net loss of $12.2 million, or $1.82 per fully diluted share, for the year as compared to a net loss of $1.5 million, or 23 cents, a year ago.
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.
