Irons Help, But Drivers Hinder Adams Golf in Q2

Adams Golf saw total net sales increase 29.8% to $25.7 million for the second quarter from $19.8 million for the same period last year, with management attributing the gain primarily to the product introductions of the Idea A2 and A2 OS Irons.

Net sales of drivers decreased to $2.8 million, or 10.9% of total net sales, for the three months ended June 30, 2006 from $6.2 million, or 31.4% of total net sales, for the comparable period of 2005. A large portion of the driver net sales for the three months ended June 30, 2006 was generated by the Redline RPM and RPM Dual product lines, which were introduced in the fourth quarter of 2004 and second quarter of 2005, respectively. The overall decrease in driver net revenue results from lower sales of RPM and Ovation driver product families as they progress farther in their life cycle.

Net sales of irons increased to $18.3 million, or 71.1% of total net sales, from $8.4 million, or 42.4% of total net sales, for the three months ended June 30, 2006 and 2005, respectively. The increase was primarily generated from the net sales of Idea A2 and A2 OS irons and integrated iron sets while the prior period net sales primarily resulted from the Original Idea irons and integrated iron sets.

Net sales of fairway woods remained constant at $4.5 million, or 17.5% of total net sales, compared to $4.5 million, or 22.8% of total net sales, for the three months ended June 30, 2006 and 2005, respectively. This period’s net sales were generated from Redline RPM Low Profile fairway woods, Idea A2 and Original Idea I-woods and Original Tight Lies. The prior period’s net sales were generated from RPM Ti and stainless steel fairway woods, Ovation fairway woods, Idea I-woods and Original Tight Lies fairway woods.

Net sales of products sold outside the U.S. increased to $5.4 million, or 20.8% of total net sales, from $3.2 million, or 16.2% of total net sales, for the three months ended June 30, 2006 and 2005, respectively. Net sales resulting from countries outside the U.S. excluding Canada increased to 6.8% of total net sales for the three months ended June 30, 2006 compared to 4.4% of total net sales for the three months ended June 30, 2005.

Net income for the quarter increased 49.7% to $1.8 million from $1.2 million last year.