Adams Golf repoted third-quarter revenues rose 4 percent to $20.5 million as compared to $19.7 million a year ago. Adams Golf had a net profit of $500,000, or 6 cents per fully diluted share, as compared to $500,000, or 7 cents per share, for the comparable period of 2010.

For the nine months ended Sept. 30, Adams Golf reported record net sales of $84.8 million as compared to $73.6 million for the comparable period of 2010, an increase of 15 percent year-over-year. For the nine months ended Sept. 30, Adams Golf had a net profit of $7.4 million, or 92 cents per fully diluted share, as compared to $7.1 million, or 92 cents per fully diluted share, for the comparable period of 2010.

Aggregate cash and cash equivalents balance was $11.3 million as of Sept. 30, and there was no outstanding balance on the company's credit facility with Wells Fargo.

“We were pleased with our third quarter and year-to-date financial results, especially in light of today's economic conditions,” said Mr. Chip Brewer, CEO and president of Adams Golf.

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


  • According to Golf Datatech LLC, through September, our year-to-date U.S. iron dollar share, in the combined On and Off Course Channels, was 10.87%, up 9% year-over-year. Our year-to-date wood dollar share in the same channels was 5.82%, up 7% year-over-year.
  • We continued to strengthen our brand through tour exposure and sustained our position as the # 1 hybrid on the PGA, Nationwide and Champions tours. A specific call out and congratulations goes out to Adams Golf staff player, Yani Tseng, who is completing a historic season and was named LPGA player of the year for the second straight season.
  • We are pleased with the market response to our new Idea a12os irons and hybrids, which were launched in the quarter and have been receiving positive reviews from both consumers and the trade. Additionally, we will be rolling out an innovative new fitting system for both hybrids and hybrid iron sets during Q4. Our intent is to further our leadership position in these categories.
  • Our domestic business grew at a healthy 12% for the third quarter of this year as compared to 2010, reflecting both market share and distribution gains; while our international business declined 23% for the third quarter year-over-year. Despite this quarterly decline in international business, our year to date international revenues are up 10% year-over-year and we continue to be optimistic about future international growth and have been making investments accordingly. We anticipate international revenue growth will resume in the first half of 2012.
  • Expenses for the quarter and year to date increased as compared to last year, resulting from our continued strategy of reinvesting back into the business along with a significant increase in legal expense associated with our on-going legal dispute against a previous insurance carrier.
  • Although unresolved, the initial court rulings on this case have been favorable to Adams Golf and we are hopeful for a meaningful recovery if and when the legal matters finally conclude. The details concerning this litigation can be found in our recent SEC filings.
  • Lastly, as per past practice, our product pipeline remains strong with exciting and innovative product launches planned for early 2012.
“Looking forward, although we recognize today's economic uncertainties and lower consumer confidence, we also believe that year to date the golf equipment business has weathered these storms reasonably well and is in a gradual state of recovery. Specific to our business, we are pleased by our performance over the last several quarters during which we believe we have delivered positive financial results and simultaneously strengthened our brand and reinvested for the future.

“Whatever the economic conditions in Q4 and 2012 may be, we remain both confident in our strategy and dedicated to creating long term shareholder value via continuing our revenue growth and brand development trends,” concluded Brewer.

                     ADAMS GOLF, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)

Three Months Ended Nine Months Ended

September 30, September 30,
——————- ——————-

2011 2010 2011 2010
——— ——– ——— ——–

Net sales $ 20,505 $ 19,685 $ 84,807 $ 73,643
Cost of goods
sold 11,180 11,432 46,635 40,653
——— ——– ——— ——–
Gross profit 9,325 8,253 38,172 32,990

Operating
expenses:
Research and
development
expenses 733 663 2,122 1,881
Selling and
marketing
expenses 5,677 4,883 20,237 17,292
General and
administrativ
e expenses 2,391 2,087 8,173 6,496
——— ——– ——— ——–
Total
operating
expenses 8,801 7,633 30,532 25,669
——— ——– ——— ——–
Operating
income 524 620 7,640 7,321
——— ——– ——— ——–

Other expense:
Interest
expense, net (8) (7) (62) (25)
Other income
(expense),
net — (8) (1) (13)
——— ——– ——— ——–

Income
before
income taxes 516 605 7,577 7,283
Income tax
expense 33 70 131 174
——— ——– ——— ——–

Net income $ 483 $ 535 $ 7,446 $ 7,109
========= ======== ========= ========

Net income per
common share –
basic $ 0.06 $ 0.07 $ 0.96 $ 1.00
========= ======== ========= ========

– diluted $ 0.06 $ 0.07 $ 0.92 $ 0.92
========= ======== ========= ========