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

                      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
 administrative    68,992,648    52,112,577   21,920,978   18,672,938
 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
                 ============= ============= ============ ============