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The economic playing conditions hampered Adams Golf, Inc. (ADGF: NASDAQ) third quarter operating results but not as dramatically as one might think. The company reported sales of $17.7 million, down 6% from a year ago when it posted revenue of $18.9 million. But where it was felt the most was on the bottom line. Adams reported a net loss of $1.2 million versus a loss of $0.3 million in the comparable quarter in 2007. A year ago, its bottom line loss was influenced by the one time receipt of a $0.5 million breakup fee it received in connection with a potential purchase of a competitive golf brand.
“Our revenue results compare favorably to overall industry performance,” stated Chip Brewer, CEO and President of Adams Golf. “According to the National Golf Foundation golf club sales were down 11.8% in Q3 and approximately 9.5% year-to-date. Furthermore, our revenues from on going products, i.e. products not launched in the reporting quarter, were up nearly 8% year-over-year. ”
The Company reported net sales of $79.0 million for the nine-month period ended September 30, 2008 compared to net sales of $77.1 million for the comparable period of 2007, a gain of 2%. It reported net income of $1.2 million, despite the third quarter loss, compared to net income of $5.9 million for the comparable period of 2007.
“In a down-market cycle, we believe that our results can best be measured by market share gains and that our company continues to gain market share in its primary categories as well as increase its brand strength,” Brewer said. “The September Golf Datatech market share reports show our U.S. wood share at 6.7% vs. 5.5% last year, an increase of 22% and our U.S. iron share at 9.0% vs. 8.5% last year, an increase of 6%. Furthermore, our Idea a3/a3os model remains the # 1 selling model of irons in the U.S. and independent consumer research shows that we have increased our position as the leader in hybrids.” The CEO also pointed out Adams Golf leads the hybrid count on the PGA, Nationwide and Champions tours, according to the Darrell Survey. “In the long run, I believe this period will strengthen our company, thereby providing the foundation for outstanding performance when market conditions do once again turn in our favor,” Brewer concluded.