Adams Golf Announces Record Year End 2011 Results
March 06 2012 - 6:00PM
Adams Golf (Nasdaq:ADGF) today reported record net sales of $96.5
million for the year ended December 31, 2011, as compared to $86.2
million for the year ended December 31, 2010, an increase of 12%
year-over-year. Adams Golf realized a net profit of $14.5 million,
or $1.79 per fully diluted share, for the year ended December 31,
2011, as compared to $5.0 million, or $0.66 per fully diluted
share, for the comparable period of 2010. Our results for the year
ended December 31, 2011 benefited from a $2.7 million adjustment to
our deferred tax asset and from a net recovery of $5.1 million
which is net of legal fees incurred during 2011, from the
settlement of litigation against a former insurance carrier.
Excluding these events, our net profit would have been $6.7
million, or $0.82 per fully diluted share, for the year ended
December 31, 2011.
"With both record revenues and a strong financial performance,
2011 was another highly successful year for Adams Golf. I am
delighted with the performance and congratulate the operating team
accordingly," said Mr. Barney Adams, Chairman and Interim
CEO.
"In addition to our financial accomplishments, we believe we
have continued to make progress with our brand development and
market positions. Evidence of this progress includes:
- According to Golf Datatech LLC, our full year 2011 U.S. iron
dollar share in the combined On and Off Course Channels was 10.94%,
up 8% year-over-year. Our full year 2011 wood dollar share in
the same channels was 5.89%, up 7% year-over-year. These same
market shares for irons and woods for the month of January 2012
were 12.2% and 8.3% respectively.
- Our domestic business grew at a healthy 12% for the full year,
reflecting both market share and distribution gains. Our total
international business grew 11% year over year, driven by a 36%
increase in markets outside of Canada and a 2% decline in our
Canadian business. We continue to be optimistic about future
international growth and have been making investments
accordingly.
- On tour, we sustained our position as the # 1 hybrid on the
PGA, Nationwide and Champions tours during 2011. Additionally, we
received excellent exposure during the year through our association
with key staff players such as world ranking # 1 Yani Tseng. PGA
Tour winner Aaron Baddeley, and Champions Tour star and all time
legendary champion, Tom Watson. Looking forward, we believe we
have further strengthened our tour position with recent staff
additions such as Kenny Perry. Robert Karlsson, and Caroline
Hedwall, among others. We believe these efforts and achievements
will help further build our brand strength in the eyes of avid
golfers.
- We are pleased with the market response to new premium product
launches such as the Speedline F12 drivers and fairway woods and
Idea a12os irons and hybrids. Our research shows that the Velocity
Slot Technology incorporated into our 2012 fairway woods and
hybrids increases both ball speed and forgiveness. We believe
this technology has the potential to drive significant market share
growth in the coming years.
- In January 2011, we purchased the intellectual property and
select assets of the Yes! branded putter business through a
bankruptcy court auction of Denver-based Progear Holdings. We
are now in process of re-launching this brand in the U.S. and
believe that over the next several years this acquisition will
provide us with opportunities for both international and domestic
growth in the putter category.
- In December 2011, we reached a settlement with a former
insurance carrier, thus wrapping up the final chapter in a lawsuit
that began in 1999 and, in the process, recovering a net of
approximately $6.4 million. This settlement, along with our
strong operating performance, allowed us to finish 2011 with cash
balance of $18.2 million and no short- or long-term debt.
- As of December 31, 2011, our net working capital increased to
$48.8 million from $35.9 million at December 31, 2010 and our net
assets increased to $62.4 million, or $7.99 per share (calculated
as total assets less total liabilities divided by outstanding
shares).
- Lastly, as per past practice, our product pipeline remains
strong with exciting and innovative product launches planned for
the balance of 2012 and into 2013.
"Looking forward, it is our belief that market conditions are
continuing to improve and that we are positioned to sustain our
progress on brand and market development. Furthermore,
although it is still early in the year, we are off to a strong
start for 2012 with field reports of both sell in and sell through
at or above expectations. As a result, we remain cautiously
optimistic for our business in 2012," concluded Mr. Adams.
About Adams Golf
Developing high-performance and technologically innovative golf
products is the cornerstone of Adams Golf. From 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, please visit www.adamsgolf.com or view
prior press releases at http://www.adamsgolf.com/news.htm.
The Adams Golf logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=5031
Forward Looking Statements
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, planned product launches and international growth, our
ability to operate profitably and protect our financial condition
and statements using terminology such as "may," "would," "expect,"
"intend," "estimate," "anticipate," "plan," "seek," "inevitably,"
"appears," or "believe." Such statements reflect the current view
of Adams Golf with respect to future events and are subject to
certain risks, uncertainties and assumptions related to certain
factors including, without limitation, the following: the impact of
changing economic conditions; product development difficulties;
assembly difficulties; competing product introductions; patent
infringement risks; our ability to protect our intellectual
property rights; market demand and acceptance of products; the
success of our marketing strategy both domestically and
internationally; 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 both domestically and internationally; and one-time
events and other factors detailed under "Risk Factors" in our most
recent Form 10-K and subsequent Form 10-Q on file with Securities
and Exchange Commission. These filings can be obtained by
contacting Adams Golf Investor Relations. Although Adams Golf
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 Adams Golf or
persons acting on its behalf are expressly qualified in their
entirety by the applicable cautionary statements.
ADAMS GOLF, INC. AND
SUBSIDIARIES |
|
|
|
CONSOLIDATED
BALANCE SHEET |
|
|
|
(in thousands, except
share and per share amounts) |
|
|
|
ASSETS |
|
|
|
|
December
31, |
|
2011 |
2010 |
|
|
|
Current assets: |
|
|
Cash and cash equivalents |
$ 18,216 |
$ 6,724 |
Trade receivables,
net |
16,786 |
16,594 |
Inventories, net |
26,480 |
27,088 |
Prepaid expenses |
209 |
632 |
Deferred tax asset, net
–current |
1,962 |
-- |
Other current assets |
3,274 |
459 |
Total current assets |
66,927 |
51,497 |
|
|
|
Property and equipment, net |
946 |
879 |
Deferred tax asset, net – non current |
11,245 |
10,228 |
Other assets, net |
1,423 |
134 |
|
$ 80,541 |
$ 62,738 |
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
Current liabilities: |
|
|
Accounts payable |
$ 7,363 |
$ 6,255 |
Accrued expenses and other
current liabilities |
10,788 |
9,384 |
Total liabilities |
18,151 |
15,639 |
|
|
|
Commitments and contingencies |
|
|
|
|
|
Stockholders' equity: |
|
|
Preferred stock, $0.01 par
value; authorized 1,250,000 shares; none issued |
-- |
-- |
Common stock, $0.001 par value;
authorized 12,500,000 shares; 8,218,726 and 8,045,078 shares issued
and 7,807,789 and 7,634,141 shares outstanding at December 31, 2011
and 2010, respectively |
8 |
8 |
Additional paid-in capital |
95,291 |
94,525 |
Accumulated other comprehensive
income |
2,727 |
2,666 |
Accumulated deficit |
(30,882) |
(45,346) |
Treasury stock, 410,937 shares
of common stock at December 31, 2011 and 2010, at cost |
(4,754) |
(4,754) |
Total stockholders' equity |
62,390 |
47,099 |
|
|
|
|
$ 80,541 |
$ 62,738 |
ADAMS GOLF, INC. AND
SUBSIDIARIES |
|
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS |
|
|
|
(in thousands, except
per share amounts) |
|
|
|
|
Years Ended
December 31, |
|
|
|
|
2011 |
2010 |
|
|
|
Net sales |
$ 96,504 |
$ 86,247 |
Cost of goods sold |
53,727 |
48,504 |
Gross profit |
42,777 |
37,743 |
|
|
|
Operating expenses: |
|
|
Research and development
expenses |
2,898 |
2,551 |
Selling and marketing
expenses |
24,145 |
20,966 |
General and administrative
expenses |
9,013 |
8,961 |
Recovery of settlement expense,
net of legal fees |
(5,125) |
-- |
Total operating expenses |
30,931 |
32,478 |
Operating income |
11,846 |
5,265 |
|
|
|
Other income (expense): |
|
|
Interest income |
3 |
6 |
Interest expense |
(73) |
(38) |
Other |
(1) |
(12) |
Income before income taxes |
11,775 |
5,221 |
Income tax expense (benefit) |
(2,689) |
174 |
Net income |
$ 14,464 |
$ 5,047 |
|
|
|
Net income per common share: |
|
|
Basic |
$ 1.87 |
$ 0.70 |
Diluted |
$ 1.79 |
$ 0.66 |
CONTACT: Pamela High
Chief Financial Officer
Adams Golf
(972) 673-9000
InvestorInfo@adamsgolf.com
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