Adams Golf reported net sales of $17.4 million for the three months ended September 30, 2009, as compared to $17.7 million a year ago, a 2% decline. Its net loss of $5.5 million, or 82 cents per fully diluted share, compared to a net loss of $1.2 million, or 18 cents, for the comparable period of 2008.
The net loss for the three months ended September 30, 2009 includes a $5 million, one time, charge to settlement expense resulting from the accrual of the settlement of the class action lawsuit. Excluding the settlement expense, our net loss for the quarter was $0.5 million, or $0.06 per fully diluted share, an improvement of $0.75 per fully diluted share compared to the same period during 2008.
The company reported net sales of $64.1 million for the nine month period ended September 30, 2009, compared to net sales of $79.0 million for the comparable period of 2008, a decrease of 19%. The Company reported a net loss of $10.3 million, or $1.55 per diluted share, for the nine month period ended September 30, 2009, compared to net income of $1.2 million, or $0.16 per share, for the comparable period of 2008. In addition to the $5 million settlement expense incurred this quarter, year to date net loss also includes the one time 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 this year. Excluding these charges, our net loss for the year is $1.7 million.
“Although market conditions continue to be difficult, we were pleased with our performance during the third quarter,” said Mr. Chip Brewer, CEO and President of Adams Golf. “In total our third quarter revenues were almost flat year over year and domestically they were up 2%. These results compare very favorably with industry data. Q3 revenues were driven by new product introductions, including the Idea a7 and a7os irons and the Speedline 9032 drivers and fairway woods. Market feedback on these new products has been positive. Furthermore our expenses continue to reflect our cost management efforts with total operating expenses down 15% year over year. Additionally, we had excellent cash flows during the quarter. We ended the quarter at $11.4 million in cash along with a strong balance sheet overall.”
“On the non-financial side we continue to be pleased with the development of our brand and our market positions. According to Datatech, during Q3 we grew both our woods and irons dollar market shares, these ended the quarter at 5.3% and 8.6% respectively. We also continued to benefit from periodic tour exposure and continued our position as the # 1 hybrid on the PGA, Nationwide and Champions tours. In addition, our Speedline 9032 driver swept the Re-Max World Long Drive Championship titles when it was played by the open division champion, Adams Golf staff player Jamie Sadlowski, as well as the individual who won both the Senior and Super Senior titles. We believe these accomplishments help strengthen our brand and create the opportunity for shareholder value going forward.”
