True Temper Sports, Inc. has announced its 2001 fourth quarter and annual results. Net sales for the fourth quarter decreased 4.0% to $22.1 million from $23.1 million during the fourth quarter of 2000. For the year, annual sales remained relatively flat, increasing by 0.4% to $111.1 million in 2001 from $110.6 million the prior year.
In his comments about the company’s performance, Scott Hennessy, president and CEO said, “The performance trends in the golf market continue to be challenging. We have experienced some overall weakness in our business, as many other companies inside and out of the golf equipment industry have faced a very difficult operating environment. Given the economic situation and circumstances we were pleased to record a solid fourth quarter, and encouraged that our 2001 annual sales and adjusted EBITDA were virtually equal to 2000.
“Although our full year sales were essentially unchanged from the prior year, the mix of products sold changed between years. We began to experience momentum with our performance tubing sales during the fourth quarter as the sales on a full year basis increased 17% to $4.8 million in 2001 compared to $4.1 million in 2000. Within the golf shaft segment, sales of driver and fairway wood golf shafts increased dramatically with the successful introduction of our new BiMatrx (TM) shaft technology while sales of higher margin steel shafts used for irons declined between years.”
In his comments about the Company’s future, Mr. Hennessy said, “Although we believe our long term outlook is positive, our incoming orders during the fourth quarter of 2001 and in the early part of 2002 are weaker than the same period last year. We believe this trend presents a challenging environment for producing year over year improvements in the near term and first half of 2002, especially when compared to the very strong results we posted in the first and second quarters of 2001. The overall weakness in the economy may continue to adversely affect our business, as customers have been planning very conservatively. Due to these factors, we remain very cautious in our outlook for 2002. At this time we do not anticipate generating significant improvements in sales and operating performance for the full year and expect to see some deterioration during the first half of the year.”
Mr. Hennessy continued, “With the general state of the economy, and the current weakness in demand for golf equipment, we may take a more aggressive approach to identify and pursue opportunities to utilize our free cash flow to grow the business through acquisitions in 2002. In addition, we may use our increased flexibility under the provisions of a recent amendment to our bank credit facility to re-purchase some of the True Temper Senior Subordinated Notes and reduce our cash interest expense.”
True Temper Sports www.truetemper.com