| Adams Golf Reports Fourth Quarter and Year End 2006 Financial Results
Wednesday March 14, 5:08 pm ET
PLANO, Texas--(BUSINESS WIRE)--Adams Golf (OTCBB:ADGO - News) today reported net sales of $13.1 million for its fourth quarter ended December 31, 2006, as compared to $9.7 million in the comparable period of 2005. The Company reported net income of $4.4 million, or $0.15 per fully diluted share for the fourth quarter ended December 31, 2006, as compared to a net loss of $1.0 million, or $0.04 per fully diluted share for the comparable period of 2005. In the 2006 fourth quarter, the Company recorded a deferred tax asset of $5.4 million, which represents its estimate of future usage of its net operating loss tax carryforward.
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For the year ended December 31, 2006, net sales were $76.0 million, as compared to $56.4 million for the year ended December 31, 2005. The Company had net income of $9.0 million, or $0.31 per fully diluted share for 2006, as compared to net income of $3.2 million, or $0.12 per fully diluted share in 2005. In the 2006 fiscal year, the Company benefited from the recording of a deferred tax asset of $5.4 million, as noted above. In the 2005 fiscal year, the Company benefited from the reversal of a legal accrual in the amount of $1.8 million and the receipt of $1.0 million for the settlement of an insurance claim.
The Company's aggregate cash and cash equivalents balance was $9.5 million as of December 31, 2006. In the fourth quarter of 2006, the Company repurchased 141,736 shares under its current stock repurchase plan. The Company repurchased an aggregate of 279,120 shares of its common stock in fiscal 2006.
"I'm very pleased with the Company's results for 2006," said Mr. Chip Brewer, CEO and President of Adams Golf. "Our growth for the year was driven primarily by our Idea hybrid iron sets which, according to Golf Datatech, LLC, have been the #1 selling brand of irons in off course golf specialty retail sales since December of 2005. We benefited in the fourth quarter of 2006 from our launches of the Idea Tech OS 8-piece hybrid iron sets and the Idea Pro 8-piece hybrid iron sets and individual hybrids. Our individual hybrids finished 2006 as the #1 hybrid played by professionals on the combined professional men's tours (PGA, Champions and Nationwide), according to results from the Darrell Survey. We also announced in the fourth quarter of 2006 our intent to purchase certain assets of Women's Golf Unlimited, which is consistent with our goal of expanding our presence in the growing women's golf equipment market. That acquisition closed in the first quarter of 2007. Lastly, we've continued to make investments in our brand and overall organization, particularly our R&D group."
Adams Golf will host a conference call at 5:30 p.m. Eastern Daylight time on Thursday, March 15, 2007, with Chip Brewer, CEO and President, and Eric Logan, Chief Financial Officer, to review Adams' 2006 fourth quarter and full year financial results. For telephone access to the conference call, dial (800) 374-0113 or (706) 758-9607 for international calls, and request connection to the Adams Golf conference call. The conference ID # is 2273498.
Developing high-performance and technologically innovative golf products is the cornerstone of Adams Golf. From the initial design, through manufacturing and servicing, Adams Golf is committed to helping golfers of all abilities enjoy the game of golf. For more information on Adams Golf, visit www.adamsgolf.com.
This press release contains "forward-looking statements" made under the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The statements include, but are not limited to statements regarding our ability to continue manufacturing products that are commercially acceptable to consumers, our acquisition of certain assets of Women's Golf Unlimited, and statements using terminology such as "may," "will," "expect," "intend," "estimate," "anticipate," "plan," "seek" or "believe." Such statements reflect the current view of the Company with respect to future events and are subject to certain risks, uncertainties and assumptions related to certain factors including, without limitation, the following: product development difficulties; product approval and conformity to governing body regulations; assembly difficulties; competing product introductions; patent infringement risks; uncertainty of the ability to protect intellectual property rights; market demand and acceptance of products; the impact of changing economic conditions; the success of our marketing strategy; our dependence on a limited number of customers; business conditions in the golf industry; reliance on third parties, including suppliers; the actions of competitors, including pricing, advertising and product development risks concerning future technology; the management of sales channels and re-distribution; and one-time events and other factors detailed under "Risk Factors" in our 10-K's, 10-Q's and other Securities and Exchange Commission filings. These filings can be obtained by contacting Adams Golf Investor Relations.
Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, actual results may vary materially from those described herein. Except as required by federal securities laws, Adams Golf undertakes no obligation to publicly update or revise any written or oral forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason after the date of this press release. All subsequent written and oral forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the applicable cautionary statements.
ADAMS GOLF, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
ASSETS
December 31,
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2006 2005
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Current assets:
Cash and cash equivalents $9,472 $10,747
Trade receivables, net 13,553 14,171
Inventories, net 24,651 16,151
Prepaid expenses 686 754
Other current assets 1,371 27
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Total current assets 49,733 41,850
Property and equipment, net 719 630
Deferred tax asset - non current 4,052 --
Other assets 1,099 1,622
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$55,603 $44,102
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $6,271 $4,691
Accrued expenses 7,463 7,284
--------- ---------
Total liabilities 13,734 11,975
Stockholders' equity:
Preferred stock, $0.01 par value; authorized
5,000,000 shares; none issued -- --
Common stock, $.001 par value; authorized
50,000,000 shares; 24,895,226 and 23,471,653
shares issued and 23,958,606 and 22,814,153
shares outstanding in 2006 and 2005,
respectively 25 23
Additional paid-in capital 90,630 89,499
Accumulated other comprehensive income 887 888
Accumulated deficit (46,147) (55,147)
Treasury stock, 936,620 common shares at
December 31, 2006 and 657,500 common shares at
December 31, 2005, at cost (3,526) (3,136)
--------- ---------
Total stockholders' equity 41,869 32,127
--------- ---------
Commitments and contingencies
$55,603 $44,102
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ADAMS GOLF, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Years Ended
December 31,
-------------------
2006 2005
--------- ---------
Net sales $76,030 $56,424
Cost of goods sold 42,304 30,309
--------- ---------
Gross profit 33,726 26,115
--------- ---------
Operating expenses:
Research and development expenses 2,607 2,285
Selling and marketing expenses 19,800 16,571
General and administrative expenses 7,879 7,063
Reversal of settlement expenses (benefit) -- (1,771)
Reversal of restructuring expense (benefit) -- (78)
--------- ---------
Total operating expenses 30,286 24,070
--------- ---------
Operating income 3,440 2,045
Other income (expense):
Interest income 201 236
Interest expense (3) (6)
Other 35 1,052
--------- ---------
Income before income taxes 3,673 3,327
Income tax expense (benefit) (5,327) 87
--------- ---------
Net income $9,000 $3,240
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Income per common share :
Basic $0.39 $0.14
========= =========
Diluted $0.31 $0.12
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Contact:
Adams Golf
Patty Walsh, 972-673-9000
Director, Investor Relations
pattywalsh@adamsgolf.com |
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