Adams Golf said that while sales slipped 5% in the first quarter, it ended the period with more than three times the open orders as a year earlier – largely because specialty retailers boosted orders amid limited availability from other vendors. 


“We had open orders totaling $18.1 million at the end of the quarter as compared to open orders of $5.3 million at the same point in 2009,” said Mr. Chip Brewer, CEO and President of Adams Golf. “We believe this increase in open orders is primarily a result of more forward looking planning by select retailers as well as delays in product availability from various vendors. We expect the product availability delays to be resolved during the current quarter.”

 

The company reported net sales of $22.4 million for the three months ended March 31, 2010, down 5% from $23.5 million in the three months ended March 31, 2009. Net profit reached $1.7 million, or 21 cents per fully diluted share, compared to $400,000, or 5 cents per fully diluted share, for the comparable period of 2009.

The company's cash and cash equivalents balance dropped 45.6% to $6.9 million at the end of the quarter and there was no outstanding balance on its credit facility with Wells Fargo.


“Furthermore, and perhaps most importantly, we continued to make progress on our brand development and market share objectives during the quarter, Brewer said.  That included:



  • Significant growth in our U.S. market shares. According to Golf Datatech LLC, for the first quarter of 2010, in the combined On and Off Course Channels, the company's U.S. iron dollar share was 12.0%, up 21% year over year.
  • Wood dollar share in the same channels was 6.5%, up 11% year over year.
  • Also according to Golf Datatech, but based on unit sales in the combined On and Off course retail channels, in March 2010 our Idea a7os iron set was the #1 selling model of irons in the U.S.
  • The company sustained its position as the #1 hybrid on the PGA, Nationwide and Champions tours.
  • It was “energized with the market response to our current product offerings,” including the Speedline Fast 10 drivers, Idea a7 and a7 OS irons and most recently, the interest in our recently introduced Idea Pro Black Super hybrids Idea Pro Black CB1 irons and our Idea Black CB2 irons.


“We are encouraged with the progress we have made in both the product and brand side of the business as well as the improved financial results,” Brewer said. “Overall market conditions in Q1 showed some signs of improvement over 2009 but remained challenging on a historical basis. We remain dedicated to working towards future growth of the company.”





















































































































ADAMS GOLF, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(unaudited)

Three Months Ended
March 31,

2010 2009

Net sales $ 22,358 $ 23,475
Cost of goods sold 12,291 14,467
Gross profit 10,067 9,008



Operating expenses:

Research and development expenses 628 853
Selling and marketing expenses 5,693 5,951
General and administrative expenses 2,105 1,841
Total operating expenses 8,426 8,645
Operating income 1,641 363



Other income (expense):

Interest expense, net (9) (16)
Other income, net — 47



Income before income taxes 1,632 394
Income tax expense (benefit) (20) 28
Net income $ 1,652 $ 366



Net income per common share – basic $ 0.24 $ 0.06
– diluted $ 0.21 $ 0.05