Adams Golf ended a strong 2007 with double-digit fourth quarter sales growth driven by the company’s hybrids, which continue to see increased penetration, especially amongst tour players. However, the top line growth did not translate into net income gains for the quarter as the company’s gross margin declined.

Net sales grew 33.6% for the quarter to $17.5 million from $13.1 million for the year-ago period. Based on filings with the SEC, the company saw strong sales in both domestic and international markets for the quarter, with U.S. sales growing approximately 29.5% to $14.5 million as international sales jumped 64.3% to $3.0 million. On a product basis, Drivers sales increased 47.6% to $772,000, though the clearance of Insight product likely had an effect. Irons sales increased 21.8% to $12.9 million and Fairway Woods grew 16.5% to $2.7 million for the quarter.


Partly due to the promotional sales, Adams Golf saw its gross margin drop 500 basis points to 38.7% of net sales for the quarter from 43.8% last year. As a result, the company’s net income declined 21.1% to $3.5 million from $4.4 million in the year-ago period. Adjusted for the recent 1-for-4 reverse split, the company reported diluted earnings per share of 49 cents, down from 61 cents last year.