True Temper Sports, Inc. reported that net sales for the second quarter were $21.2 million, compared to the $37.7 million in the second quarter of 2008. Net sales for the first six months of 2009 totaled $39.7 million, versus the $73.6 million in the first six months of 2008. . The net loss for the second quarter was $12.7 million versus a net loss of $0.1 million in the year-ago quarter.
During the second quarter, gross profit decreased to $3.3 million from $14.0 million, and SG&A was reduced by 33% to $3.0 million from $4.5 million, resulting in positive Adjusted EBITDA for the second quarter of $1.0 million compared to $10.4 million in the second quarter of 2008. Aggressive expense management and cost controls also enabled the company to deliver positive earnings in the form of Adjusted EBITDA for the first six months of 2009 totaling $1.6 million, compared to $20.0 million in the first six months of 2008
In his comments about the company's performance, Scott Hennessy, President and CEO said, “As we anticipated, the global recessionary pressures and weaker retail landscape for discretionary consumer products continued to affect our unit volume and overall revenue results during the second quarter. In addition, the quarter experienced further reductions in overall channel inventory within the golf industry, as retailers, OEMs and component suppliers continued to streamline their operations and worldwide distribution networks. In the face of this most challenging economic environment we have remained focused on cost controls and reductions, aggressive working capital management, and maintaining our dominant market share position. We are quite pleased with the results of our efforts in these three key areas during the first six months of 2009. Through careful expense management in every area of our business we have brought our cost structure in line with the current market demand, and have maintained positive Adjusted EBITDA despite the significant volume decline. Through a concerted effort in a number of areas we have been able to significantly reduce our working capital and maintain a record level of cash reserves, most prominently through a nearly 30% reduction in inventory carrying levels during the past nine months. Most importantly, we have maintained our market share position in our core golf business by continuing to deliver the best products and service to our global customer base.”
Commenting on the company's outlook for the future, Mr. Hennessy said, “Although we remain in the midst of a significant economic downturn that has clearly impacted the golf industry, we have recently seen some signs of stabilization in order patterns and bookings that are somewhat encouraging. While specific short-term forecasting remains quite difficult, we are excited about our new product initiatives and anticipate some improvement in the year-over-year rate of decline for the remainder of 2009. We remain confident that eventually the golf industry will recover along with the overall economy, and we are fully committed to the long-term success of True Temper Sports and to supporting our OEM partners with the best products and service available globally. We continue to take aggressive actions to reduce our costs and working capital, as we maintain the necessary investments required in our expanding global manufacturing base and key research and design capabilities. This will ensure that we continue to bring innovation to the market and strong value to our customers both now and in the future. In addition, we will continue to work with our lenders to arrive at a financing arrangement that addresses the company's current leverage, ensuring that our capital structure is consistent with the current retail and credit market landscape. We remain in active, collaborative discussions with our financing partners related to the non-compliance on our various debt agreements disclosed during the first quarter, and we are certainly very encouraged by the progress being made to rectify the situation in a positive way for the company. We do not expect this process or its outcome to impact our company's ongoing operations, customers, vendors or employees.”
