A slight sales increase was not enough for Adams Golf to post any bottom line gains for the second quarter as net income fell 42.6% to $1.2 million or four cents per diluted share, from $2.0 million, or eight cents per diluted share, in last year's quarter. Total net sales increased to $19.8 million for the second quarter from $19.7 million for the comparable period of 2004.
Gross margin declined 410 basis points to 45.6% of total sales for Q2 2005, from 49.7% of total sales last year, due to lower average selling prices of certain wood product lines according to the company.
Net sales of drivers increased 93.8% to $6.2 million, or 31.4% of total net sales for the quarter, from $3.2 million, or 16.0% of total net sales last year. The RPM and Ovation driver product lines, introduced in the fourth quarter of 2004 and the first quarter of 2005, respectively, provided the growth in the category, which was partially offset by lower sales of maturing product lines. Net sales of irons decreased 7.7% to $8.4 million for the second quarter, or 42.4% of total net sales, from $9.1 million, or 46.2% of total net sales last year. The company attributed the decrease in irons to lower sales of maturing product lines. The fairway woods segment took a hit during the quarter as well, decreasing 35.7% to $4.5 million, or 22.8% of total net sales, from $7.0 million, or 35.6% of total net sales. Adams Golf pointed to the decline in sales of the Ovation family of fairway woods, which was introduced in the first quarter of 2004, as the main culprit.
