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Gilford Securities analyst Casey Alexander's updated clients on the progress of Callaway Golf (ELY: NYSE) business. Alexander lowered his revenue and earnings estimates for this year on Callaway based on the economy and the weather specifically in the Midwest during the selling season for equipment. “The degree to which corn planting over a 22 state geography had fallen behind made it clear to us that weather was a significant issue,” said Alexander, “and that therefore rounds played were almost certainly down for the spring months in those geographies. If you can’t plant corn, you aren’t playing golf. If you are stacking sand bags, you aren’t playing golf.” He has lowered his expectation in the second quarter for Callaway sales by $10 million and shaved his earnings per share estimate from $0.70 to $0.65 per share. “We are taking Q3 revenues down from $230 million to $220 million and EPS from $0.03 per share to $0.02 per share,” he added. “For Q4 we are lowering revenues from $150 million to $140 million and increasing the loss per share from ($0.23) per share to ($0.24) per share. This takes our full year EPS estimate down from $1.08 per share to $1.01 per share, matching the current low estimate on the Street.” Commenting on the industry, he said, “The US market looks like it could produce a year where equipment sales come in down 7%-8%, which may not sound that bad until you judge it against 10 years of equipment sales that were +-2% regardless of what the economy was doing.” Alexander is maintaining a Hold rating on shares of Callaway to investors. “The Q2 report should be fascinating as we try to determine just how difficult this environment has been on Callaway Golf,” he stated.


AboutGolf is a 20-year-old golf company and its business is indoor golf simulator technology. While its human nature to associate the product to the corresponding business, several steps are integrated in order to determine an ultimate commercial application and for the Maumee, OH., business this process involves several layers. “I'm in the business of golf performance technology,” explained Bill Bales, AboutGolf’s CEO on his blog site, in February. “Golf performance technology is a new term relating to high-tech stuff that can help you become a better golfer. According to the PGA of America, 2008 marks the dawn of the launch monitor. If you didn't know, the PGA is a bit slow on the uptake. They still use slide rules and rotary dial phones (at least they still remember stymies and gutties). Launch monitors have been around quite a while. The first valid launch monitor to make a name for itself was made by a company called Swing Dynamics, maybe two hundred “tech-years” ago. They aren't around anymore, but more than a few members of the golf community still promote it as the most advanced technology available,” he continued. “Notwithstanding the PGA’s take, launch monitors started going mainstream in 2003 with a product called Vector. Vector was/is a two-dimensional photographic system designed to take two pictures of the ball shortly after launch,” Bales said. “Marks on the ball enable the system to provide a measurement of ball data. The Swing Dynamics system was of the same technology, perhaps even a bit more accurate when used properly, but much more expensive and difficult to operate. The Vector was an instant success because of its portability and relative ease of use. “The current popular price leader is a product called Zelocity. Like the Vector, its data is not extremely accurate (their salesmen would take issue with this). But it’s so easy to use that even a below average simian can run it, which is a good thing considering most PGA pros didn't go to MIT (I’m sure I’ll catch some flak for that remark, but my journalistic integrity demands I call it like I see it),” Bales continued. “The big name price-no-object product out there today is called Trackman. Like Zelocity, it applies Doppler radar technology. Radar has been around since the Haskell ball, but Trackman’s architecture applies the Doppler radar in a more sophisticated way, called phased array. To be overly simple (about as much as my below average simian brain can achieve), Trackman radar is 3D and Zelocity is 2D. And, 3D isn't just one better than 2D–it’s better in exponential proportions (imagine if the world was 2D–that wall ten feet away would be right in front of you–you’d be stuck in the same place for life),” the CEO said. “Trackman is, overall, a much more accurate system than Zelocity or Vector, although it doesn't measure spin in the true sense of the word. A little voodoo takes place between what they measure and the data that comes out. But it's pretty good. The real deficiency lies in Trackman's ability, or lack thereof, to measure spin axis--radar can't do it. But Trackman has made a name for itself as a long range-tracking device. It follows the ball for over 300 yards, so they say. Hence it can see which way the ball curves and guesstimate the spin vector


Barney Adams has a book out chronicling his love affair with the golf business. Adams provides a first hand account of his failures, which lead him to his ultimate success in a style that mirrors his personality. Adams is a throw back, a compliment I’m sure he would agree, in more ways than one. The golf industry has known many personalities through its history who have attempted to duplicate success from other industries inside the golf equipment world. Adams, however, is one of the few who is willing to provide a balanced account of the good, the bad and well, the ugly too. For those who may be concerned the book is a platform for “Barnyard” to extol the success of his company, Adams Golf, it’s actually an area he downplays somewhat when contrasted to the many challenges he encountered. Adams’ book, “The Wow Factor,” offers a candid and somewhat sobering story line of his experiences long before the world knew of him due to his Tight Lies clubs, infomercials or his company’s public offering. The book should be a must read for those who ever contemplate entering into the golf equipment arena if they believe that they have the latest and greatest new invention. But it certainly is a prerequisite to anyone who wants to know what it takes to make it in business or in life.


The golf world just hasn’t felt the same since Tiger Woods went on the shelf. With no disrespect intended to his peers, Woods is clearly the main attraction when it comes to the PGA Tour. His presence becomes the focus of the media as well as fans and deservedly so since his performance speaks for itself. While many had hoped for the world’s #1 to be in this week’s field at the Memorial, it wasn’t meant to be. However, Woods did make an appearance with the media and offered some clues as to what he has been up to since he was last seen. “I started my practice basically just recently,” Woods explained. “So going to Memorial, it wouldn't have made any sense. I”m not sharp enough. I didn't hit all my shots I needed to, at home and make sure everything is organized. I wasn't quite ready. So no sense in going there (if I’m) not ready. The whole idea is to be ready for the U.S. Open.” The best player on the planet said his rehabilitation is boring but on schedule. “Knee is doing better, everything is on schedule. It gets really old riding that bike, man,” he said. But Woods has progressed to the point where he preparing to let his clubs do the talking for him. “I'm hitting the driver and I'm playing. If it is a feel thing, I shut it down when I feel it is time to shut it down. It's on a day-to-day deal. Some days it is not very long. Some days it is all day,” he shared. Despite all that he has accomplished in his time on the PGA Tour, speculation has followed him anytime he has had an extended break from competitive play. A year ago, it centered on the birth of his first child and whether it would effect his play inside the ropes, as comical as that might sound today. But Woods has demonstrated time and time again that when he returns his game hasn’t suffered. “ I know what it takes to win a tournament coming back off after having a procedure done, and it is just a matter of being prepared, getting all my practice time in, making sure my shots are how I want them, trying to understand what my misses might be,” he said. “ But it's not like I haven't been down this road before. I had a procedure done and came back at Torrey Pines. It would be nice having a feel going into any tournament really. Kind of an understanding what the misses might be, what they have been. Get some sort of idea about playing a number of events. I don't have that opportunity. But you don't really know until you get under tournament heat what your misses are going to be. Hopefully I can rectify them if that happens.” Woods return to the Tour will be a welcome sight not only for the media and fans but if history is an indicator to his future performance, his bank account too...


Earlier this year, January 16, 2008, Callaway Golf issued a notice of default to Ashworth Inc. under the parties’ May 14, 2001 License Agreement. Ashworth has denied that any breach has occurred, and has not taken the steps requested by its business partner to rectify the matter. Callaway, therefore, believes it is within its rights to terminate the Agreement and has communicated such to Ashworth. The two parties then conducted a mediation of the issue back on April 23, 2008, pursuant to dispute resolution procedures specified in the Agreement. However, it was still not resolved and Callaway is now demanding binding arbitration to resolve the dispute. According to a quarterly filing with the Securities and Exchange Commission, Ashworth stated that it believes it would have claims against Callaway in the event that it wrongfully terminates or interferes with the Agreement. Callaway contends it is not aware of what such claims might be, but it currently is unaware of any basis for a meritorious claim against it based upon the handling of the alleged breach by Ashworth.


The European media met with George O'Grady, European Tour chief executive last week and received a progress report on drug testing for their Tour. “We're almost certain starting the week of the European Open or maybe it will be the Scottish,” O’Grady said as to when it would be implemented. “Those are the two weeks. We'll be assisted at the same time with the PGA Tour.”
O’Grady said the US PGA Tour, PGA of America, R&A, US LPGA and Ladies European Tour are all on the same page as far as the rules and regulations for the program. “We all have effectively the same policy,” said O’Grady. “We are charged with pulling the rest of the world into shape. The PGA of America have announced and I see that they are going to do it at the PGA Championship; first major to do testing using the PGA Tour's policy. And they also will have the anti-doping unit, it will be on site for The Ryder Cup; whether we use it or not will depend on things on the week, but it will be there, so if someone chose to, it could happen.”
The R&A has deferred until next year implementing the testing. The man in charge of the European Tour offered his opinion on why it won’t be in effect for the Open Championship in July. “I think the R&A have a different reason, because they start the qualifying much earlier in January, the international qualifying. So they feel the same conditions should apply on the first qualifying shot of a tournament to the end.”