Golfsmith International Holdings, Inc. increased net revenues 44% to $65.8 million for the fiscal 2004 first quarter ended April 3 compared with net revenues of $45.8 million in the first quarter of fiscal 2003, due in large part to the retailer's expansion program, customer service and strategic customer retention programs.

“We're executing on our strategy of growing our multi-channel business through store expansion in new and existing markets, Internet and catalog growth, and specialty services that help our customers get more out of their golf games,” said Jim Thompson, president and chief executive officer of Golfsmith, a portfolio company of First Atlantic Capital, Ltd. “In 2004, we will continue to look for opportunities to build on our multi-channel model and aggressively compete for market share in key golf markets by delivering superior customer service, leading brand names and specialty services that strengthen the Golfsmith brand with golfers.”

Operating income was $2.5 million for the period, compared with operating income of $600,000 in the first quarter of fiscal 2003. Golfsmith narrowed its net loss $202,961 compared with a net loss of $1.2 million for the first quarter of fiscal 2003.

Same-store sales, defined as sales from stores opened for more than 13 months, increased 23.9%, compared with a 2.2% decline in the first quarter of fiscal 2003. This represents the fourth consecutive quarter of growth in same-store sales.

The company believes the increase in same-store sales in the first quarter of fiscal 2004 was correlated with the rise in the number of rounds played in the U.S. compared with the same period in the prior year. The increase also was driven by the cross-marketing benefits of Golfsmith's multi-channel retail model, Golfsmith's new retail store concept and the company's specialty retail services, such as the 90/90 Nationwide Playability Guarantee, the golf club trade-in program, try-before-you-buy in-store services, custom fitting and The Golfsmith Credit Card(TM).

                Golfsmith International Holdings, Inc.
                 Consolidated Statements of Operations

                                                Three Months Ended
                                               April 3,     March 29,
                                                 2004         2003

Net revenues                                 $65,782,039  $45,830,119
Cost of products sold                         42,806,857   30,972,343

Gross profit                                  22,975,182   14,857,776

Selling, general and administrative           20,167,893   14,258,838
Store pre-opening expenses                       329,238            -

Total operating expenses                      20,497,131   14,258,838

Operating income                               2,478,051      598,938

Interest expense                              (2,795,405)  (2,638,496)
Interest income                                      731        7,477
Other income                                       2,434        5,693
Other expense                                    (13,167)      (2,334)
Loss before income taxes                        (327,356)  (2,028,722)

Income tax benefit                               124,395      811,319

Net loss                                     $  (202,961) $(1,217,403)