True Temper Sports, Inc. had a difficult third quarter as sales decreased in its golf shaft business, which accounted for approximately 90% of sales. Sales in the quarter decreased 15.8% to $21.5 million from $25.5 million in the year-ago quarter.
Golf shaft sales fell 18.5% to $19.4 million from $23.8 million last year. This decline in net sales was attributed to a reduction in the unit sales of premium steel golf shafts and stock OEM graphite golf shafts.
Performance sports sales, which houses the bike and hockey businesses, grew 22.6% to $2.1 million in the third quarter from $1.7 million in the year-ago period.
Net sales to international customers decreased 10.4% to $8.9 million. The decline in export sales for actual consumption outside the U.S. was described as “relatively consistent with the decline in U.S. domestic sales.”
Gross margin decreased 930 basis points to 31.6% of net sales from 40.9% last year. For golf shafts, GM also fell 930 basis points to 33.0%, while performance sports division margins fell 260 basis points to 18.3% of sales. SG&A expenses increased 110 basis points at True Temper in the quarter to 15.2% of net sales from 14.1% last year.
The sales decline combined with margin shrinkage and expense expansion caused the companys net loss to increase more than four-fold to $4.1 million from a loss of $0.7 million in the year-ago quarter.