Golfsmith International Holdings, Inc. reported net revenues for the third quarter ended October 2 increased 3.9% to $73.9 million compared with $71.1 million in the same period of the prior fiscal year. Same-store sales decreased 7.9% in Q3 compared to an increase of 12.6% in same store sales in the third quarter of fiscal 2003.
Operating income decreased 40.8% to $2.6 million, compared with operating income of $4.4 million in the third quarter of fiscal 2003. Net income was almost cut in half to $536,000 from net income of $1.0 million in the third quarter of fiscal 2003.
“While the third quarter was slower across the golf industry, we continued to position ourselves for growth by gaining traction in key golf retail markets, adding retail talent to our management team and fine-tuning our national multi-channel retail offering,” said Jim Thompson, president and chief executive officer of Golfsmith, a portfolio company of Atlantic Equity Partners III, L.P., a fund operated by First Atlantic Capital, Ltd. “Were pleased with our performance over the first nine months of fiscal 2004.”
In the fourth quarter of fiscal 2004, Golfsmith will open four new superstores in the key golf markets of Orlando; San Diego; and Livingston and Paramus, New Jersey. The stores are designed to introduce Golfsmith’s brand and store concept in Florida and San Diego and strengthen its existing presence in the New York metropolitan area. The openings will raise its retail footprint to 46 stores nationwide.
Golfsmith continues to make key additions to its management team to help grow its multi-channel retail operations, build the Golfsmith brand and strengthen its position in the national golf retail market.
Recent changes include: the appointment of Ken Brugh, existing vice president of real estate, to vice president of store operations and real estate; the hiring of Matt Corey as vice president of marketing from The Bombay Company; the hiring of Jerry Dent as vice president of supply chain operations from The Home Depot; the hiring of Shawn Luo as director of supply chain and inventory productivity from Circuit City; the hiring of David Lowe as director of proprietary brands from Top Flite; the hiring of Randy Peitsch as senior buyer of pro-line golf equipment from Galyans Sports and Outdoor; and the hiring of Jared Tanner as director of Internet marketing from Cheaper Than Dirt!
Golfsmith International Holdings, Inc.
Consolidated Statements of Operations
(Unaudited)
Nine Months Ended Three Months Ended
--------------------------- -------------------------
Oct. 2, Sept. 27, Oct. 2, Sept. 27,
2004 2003 2004 2003
--------------------------- -------------------------
Net revenues $236,621,309 $196,226,918 $73,895,536 $71,140,692
Cost of products
sold 155,755,165 132,205,182 49,378,753 47,780,221
------------- ------------- ------------ ------------
Gross profit 80,866,144 64,021,736 24,516,783 23,360,471
Selling, general
and
administrative 68,992,648 52,112,577 21,920,978 18,672,938
Store
pre-opening
expenses 396,580 488,413 14,382 325,605
------------- ------------- ------------ ------------
Total operating
expenses 69,389,228 52,600,990 21,935,360 18,998,543
Operating income 11,476,916 11,420,746 2,581,423 4,361,928
Interest expense (8,393,503) (8,171,461) (2,796,936) (2,720,439)
Interest income 24,934 38,012 20,409 16,385
Other income 1,102,306 114,838 1,074,557 67,247
Other expense (63,047) (4,000) (16,874) 43
------------- ------------- ------------ ------------
Income before
income taxes 4,147,606 3,398,135 862,579 1,725,164
Income tax
expense (1,549,718) (1,382,515) (326,924) (713,355)
------------- ------------- ------------ ------------
Net income $2,597,888 $2,015,620 $535,655 $1,011,809
============= ============= ============ ============
