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Adams Golf Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 11, 2012 05:20PM

Adams Golf Inc. (ADGF) filed Quarterly Report for the period ended 2012-03-31. Adams Golf Inc has a market cap of $86 million; its shares were traded at around $10.78 with a P/E ratio of 13.1 and P/S ratio of 0.9.



Highlight of Business Operations:

During the three months ended March 31, 2012, we generated approximately 25% growth in net sales compared to the three months ended March 31, 2011. This overall growth was driven by an increase in our sales volume due to our continued success in product development and overall brand growth. Total operating income for the three months ended March 31, 2012 increased by $3.7 million (or 90%) to $7.8 million compared to $4.1 million for the three months ended March 31, 2011. Our operating income for the three months ended March 31, 2012 was favorably impacted by the net reversal of our former CEO s incentive accrual after his departure on February 29, 2012, which is reflected as a decrease of approximately $1.0 million in general and administrative expenses.

Total net sales increased to $37.8 million for the three months ended March 31, 2012 from $30.2 million for the three months ended March 31, 2011. Our sales were primarily driven by sales of the Speedline F12 drivers and fairway woods, the recent launch of the XTD fairway wood and hybrid, Idea a12 pro and a12 OS family of irons and hybrids, Yes! Putters, the Idea a7 OS irons and hybrids, and integrated package sets. Several factors affect a product's life, including but not limited to, customer acceptance, competition and technology. As a result, each product family's life cycle generally ranges from six months to three years. 18 The following table shows the percentage of our net sales by product type for the three months ended March 31, 2012 and 2011:

Net sales of our products outside the United States increased to $6.4 million, or 16.9% of total net sales for the three months ended March 31, 2012, from $5.2 million, or 17.1% of total net sales, for the three months ended March 31, 2011, respectively. Net sales resulting from countries outside the United States and Canada increased to 9.5% of total net sales for the three months ended March 31, 2012 from 6.0% for the three months ended March 31, 2011.

Selling and marketing expenses increased to $7.3 million for the three months ended March 31, 2012 from $6.6 million for the three months ended March 31, 2011. The increase was primarily the result of an increase in marketing and tour expense of $0.1 million, increased compensation expense of $0.1 million, and increased commission expense of $0.3 million associated with higher revenues.

Cash and cash equivalents decreased to $8.4 million at March 31, 2012 compared to $18.2 million at December 31, 2011. The $9.8 million decrease was primarily due to an increase in accounts receivable of $21.7 million, partially offset by increased earnings, a decrease in inventory of $3.2 million and a decrease in other assets of $0.7 million.

Read the The complete Report



Stocks Discussed: ADGF,
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