Sport-Haley, Inc. and Explorer Gear USA, Inc., a California corporation have entered into a joint venture in order to manufacture and market Top-Flite branded apparel to Wal-Mart Stores, Inc. in the U.S. The joint venture is to be formed and operated as a separate Colorado limited liability company. Callaway has given Sport-Haley its consent to use the Top-Flite license in connection with the LLC, subject to certain conditions. The first significant deliveries of Top-Flite apparel in conjunction with this agreement are expected to be made in approximately January 2006.

The JV will allow Sport-Haley to supplement its Green Grass apparel operations, sold under Ben Hogan and Sport-Haley, with mass-market retail. Explorer Gear has an existing relationship with Wal-Mart, where it already sells Top-Flite branded apparel into Wal-Mart’s Canadian stores.