True Temper took a note from our salmon friends, swimming against the golf industry currents as the company posted decent gains for the quarter over last year. Net sales improved 6.3% to $32.1 million from $30.2 million in the year-ago quarter. Gross margin declined 80 basis points to 40.1% of sales, but TRUE also pushed SG&A expenses down 90 points to 13.0% of sales. Net income improved to $180,000 from a loss of $8.0 million last year. Both the first quarter of 2004 and the first quarter of 2005 were impacted by costs associated with acquisition and recapitalization. Without the effects of these costs, net income would have increased 6.7% to $9.6 million for Q1 2005 from $9.0 million for the first quarter of 2004. True Temper management also noted the shift in production of composite manufacturing from SoCal to China, the launch of new products, and general cost control programs as factors leading to the improvement in net income.
Despite the improvements posted for the quarter, management was hesitant in its outlook for the rest of the year. Their reluctance is likely the result of the sluggish golf market which has seen few gains this year.
Scott Hennessy, president and CEO, summed up this sentiment with his forecast: “Given our current incoming order pattern [and] the momentum in the marketplace for our new products, we currently believe our 2005 second quarter sales potential is for stronger improvement or double digit growth over the comparatively weak second quarter of 2004… At this time, we are confident that full year results will exceed 2004, but the magnitude remains to be seen.”
