VOLUME 12, NUMBER 27
Web Street Golf Report
VOLUME 12, NUMBER 27
Monday, July 6, 2009
PGA TOUR AGREES TO CHANGE NEXT YEAR: Its been said many times throughout history when describing sports that its a game of inches. That is certainly the application in golf, as the ball gets closer to the hole. A bounce here or there or a lip out when putting is an indication of how important the difference can truly be. However, it appears in the not too distant future that statement will be reduced even further as in perhaps millimeters.
The PGA Tour has decided it will continue on its original path towards implementing the rule change next year for grooves, set down by the USGA. There was growing chatter that the Tour policy board would recommend it be pushed back for a year since it is believed a majority of players are not prepared for the upcoming change. However, when push came to shove the policy board delivered the hot potato in the lap of the PGA Tour commissioner, Tim Finchem, “The way the PGA Tour works is the Commissioner is authorized to manage competitions, and that includes the use of a condition of competition that's in the Rules of Golf,” Finchem explained.
“The board had a thorough discussion of the issue and did not take action, which by default means that it is left up to the Commissioner and staff to make the decision. I had come to a conclusion as to that decision, and I made that clear to the board, and they nevertheless left it up to me to move forward, and that's what I am relating to players today.”
Despite opposition from some players and equipment manufacturers, the dye is cast and starting on January 1, 2010, Tour players will be swapping out their irons, like it or not. Most recently, Karsten Manufacturing, which builds Ping products was outspoken on the topic.
Chairman & CEO John Solheim, who has adamantly opposed the USGA and R&A New Groove Rule since it was first proposed February 27, 2007, released the following statement from the company’s Phoenix, Arizona headquarters on the eve of the expected Tour vote: "The new groove rule harms the game and golfers and should be dropped. The recent uproar about it from PGA Tour players demonstrates this fact,” said Solheim. “However, the PGA Tour's proposal to delay implementing the rule is not a solution. You can't turn a bad idea into a good one by waiting an extra year to adopt it. We hope everyone who cares about the future of this game keeps that simple concept in mind."
Among the points Solheim cited is that once the rulemaking bodies approve a golf club, it should remain approved. He also stated the USGA has not demonstrated that any change in any PGA Tour statistic is due to grooves. “ If the rule making bodies believe that grooves are wreaking havoc on the PGA Tour, why is it that among the hundreds of statistics kept by the PGA Tour, no one has ever deemed it worthwhile to identify the specific grooves each individual PGA Tour Pro is using in his irons and wedges. If grooves truly are a problem, it seems obvious that someone would gather and analyze this easily obtainable data before telling tens of millions of golfers the USGA is reversing its prior approval of hundreds of millions of golf clubs. The failure to do so suggests there may be something else going on here,” the company stated. These feelings are now somewhat moot unless further action is taken to prevent this from happening.
“We will have an onsite testing device that will be user friendly,” Finchem said. “It will be similar, really, from an execution standpoint as the device we use and continue to have available with regard to the spring-like effect in drivers, so-called Coefficient of Restitution issue for measuring that. We will have the same capability, and we will put resources behind making sure that that capability is available to utilize as needed as we make this transition.”
LOOKS LIKE TIGER HAS ANOTHER EDGE ON THE COMPETITION: Tour players as well as wannabes are on notice that starting next year the rules are changing. The most notable player on the planet, that being Tiger Woods, isn’t concerned with what he and his peer group will be facing in six months time. “I think it's great,” Woods said prior to the start of his AT&T event. “We've had plenty of time to make our adjustments. We've known for over a couple years now what this decision was going to be, when it was going to come down, and we've had plenty of time to make our adjustments. All the companies have been testing and getting ready for this, and the guys will make the changes. It'll be interesting seeing guys catching flyers and not being able to spin the ball back out of the rough. Their decision is how they play par-5s whether they will they try and drive drivable par 4s now. Short-siding yourself is obviously going to pay a little more of a price, and you know, how many more 64-degree wedges you're going to see with the balls being as firm as they are. Are guys going to start going to a spinner ball?”
As far as adjustments or advantages once the new groove rule goes into effect, Woods said, “I think it'll be an advantage to the guys who play spin golf ball already. Guys who play harder ball are going to have to make a bigger adjustment to the grooves and there are few guys who play a softer ball, and I do play a pretty soft ball, and I'll have to make less of an adjustment than most.”
SOME GOOD FOOT SOLDIERS: Jim Fuyrk offered his two cents on the upcoming groove change. “I don't think it's going to change the way golf looks to fans,” he began. “I don't think it's going to change the look of the game. I think it's going to change the way we play the game, if that makes sense. Maybe the golf savvy fan will be able to figure it out, but I think that's a very small percentage of guys that can pick out whether shots are spinning as much as they were the year before. Conditions are different every week. Some greens are firm, some are soft. Pebble Beach, it's probably not going to make that big of a difference. At the U.S. Open it could make a huge difference,” he continued.
“I've sat in being a member of the PAC, I've sat in a lot of meetings, heard different arguments. From a PGA Tour perspective, I think we did what was right for the PGA Tour. As far as going ahead and going along with it, we're going to have to conform next year, make sure all our grooves are at a certain level.
“For the game of golf, it's a whole different story. I don't know if I like the idea that we get tested and I think it'll test our skills better as professionals, but I'm not so sure that Joe 18-handicapper, he might as well have some equipment that helps him play better and helps him enjoy the game more.”
Meanwhile another veteran on the PGA Tour seemed indifferent to the change coming in clubs. “I've only ever played V-grooves, so I don't have any trouble stopping the ball,” said Steve Elkington, “so I don't think it'll take these guys very long. Just the shots around the green with the 60-degrees that we set up a lot of shots to spin it, you have to change your thinking on that a little bit. You're going to have to lay up a bit further back or whatever. It used to be in the old days, you used to play wide, never short side yourself. But when the square grooves came in, short-siding it was out of the question because you could do something with it from the short side. Well, now I think you have to play a little bit more percentage golf.”
SPIN RATES WILL BE OFF 30 TO 50%, TITLEIST SAYS: While the best player in the world is endorsing the change in grooves, the decision doesn’t get the blessings of the Acushnet Company, which oversees the Titleist, FootJoy and Cobra Golf brands.
"Once the new groove dimensions were finalized, in the rule as adopted in August 2008, we developed a new groove for wedges and began Tour player testing in March 2009. We have since tested a significant number of Tour players comparing the current and the new groove configurations,'' a company statement attributed to Joe Nauman, Executive Vice President, Corporate and Legal for the Acushnet Company said.
"Our test results are consistent with testing conducted by the USGA/R&A that revealed a spin rate reduction of between 30 percent and 50 percent for full shots out of the rough. However, our testing also revealed significant changes in ball launch angle, trajectory, angle of descent and roll out on the green. The testing also revealed significant differences in performance depending on player club head speed and short game technique. Player reaction to what they saw was dramatic. They were caught off guard by the magnitude of the performance difference and expressed concern about the extent of the transition process,” he stated.
It would appear at the very least the PGA Tour product (performance) is somewhat up in the air next year as the USGA ruling and subsequent endorsement by the PGA Tour itself, is going to present a few new wrinkles for those who seek employment inside the ropes. In the meantime, said players still have the remainder of 2009 to stockpile their bank accounts in the event there becomes a subsequent turn in their respective performances after that.
“We believe, and players have confirmed, that the conversion process will not be a simple
exchange of existing wedges with new grooves,” Acushnet said. “The conversion process may involve different wedge designs and lofts, different shot technique, different golf balls and different set configuration (including drivers). These types of changes are iterative and take time. They also require significant support from players and equipment manufacturers. There are approximately 1,500 exempt tour players worldwide. We don’t believe that this extensive transition process will begin in earnest until late in 2009, when manufacturer tour support is almost non-existent. That is particularly true for tours outside of the United States.
“The groove rule change is the first time in the history of contemporary competitive golf that equipment performance has been rolled back. Making a change of this presidential significance requires that the conversion process be conducted in a thorough, deliberate manner taking the interests of all constituencies into account. Regardless of how much research and thought went into the development of the rule change, as with any significant change, there are unforeseen issues and complexity, particularly at the point of implementation and adoption. There is no way to predict many of these issues and they only surface during the actual conversion process, as described above. While no one is to blame for these circumstances, the major logistical issues of implementation still need to be taken into account.”
DOUBLE TROUBLE: In recent years when the USGA has mandated an equipment rule change it has prompted a replacement cycle. For example, when the governing body set 460 ccs as the maximum size for driver heads, equipment companies quickly and somewhat unilaterally moved their designs to this standard. In turn consumers and Tour players, began adopting this into their respective bags. However, with the changes coming in groove sizes, one equipment company doesn’t see the replacement cycle being as favorable as it was in the past.
“Our research indicates that the majority of retailers and consumers only have an interest in product with the new groove configuration if product with current grooves is not available,” the Acushnet Company stated. “ On the current schedule that is January 1, 2011. One of the most significant consequences of this equipment roll back is that not aligning adoption of the Condition of Competition with the manufacturer sell by date creates a bifurcation between the equipment that the Tours are using and the equipment consumers have available in the market place. That disconnect is also unprecedented. We believe that alignment of these dates to January 1, 2011 is critical as it allows for a thoughtful, orderly and comprehensive implementation of the proposed new grooves for all parties. Non-alignment is not in the best interests of the game of golf and all of its constituencies.”
With the economy providing the strongest of headwinds for equipment companies in 2009, it would appear the rule change, in the opinion of the Acushnet Company, may defer some future sales until 2011, when all new products must comply to the new standards. The kicker in this could be that both balls and clubs are affected as Tour players modify their equipment needs as they adjust to the new grooves and reduction in spin rates. For many years, recreational golfers have looked up to the best players in the world for validation towards equipment products and manufacturers have drafted off this strategy. As Tour players have strived towards equipment optimization, a portion of the recreational population has done so likewise. But if the groove change has the desired affect whereby spin rates on golf balls are dramatically affected by shots produced from the rough, it may cause many players to rethink their on course strategies but as well the clubs and balls they carry from week to week. It’s uncertain whether this will have any influence, positive or negative towards retail trends in 2010 but it may generate confusion with casual to avid players. The needs of the few (perhaps its just those of the USGA) outweigh those of the many. Consider the Association receives in the neighborhood of 9,000-plus entries for U.S. Open qualifying. How will those players get their hands on product from manufacturers, if not introduced on a mass commercial basis to be used for qualifying? The retail community and the manufacturing side would likely be reluctant, due to the economic pressures as well as confusion to make both sets available simultaneously. Its also a fair assumption to suggest the new groove patterns will force equipment companies into additional costs in building the product versus before, which it can only hope to pass along to consumers
RULES WERE MEANT TO BE BROKEN: There appears to already be some gray areas with respect to enforcing the impending groove rule change with respect to the various worldwide tours. “No, we're not going to act in lockstep,” stated Commissioner Finchem. “Everybody has their own qualifier situation. The R & A has already decided that they would not apply the (groove) condition to some of the early qualifying for the British Open. The USGA is considering the notion of not applying the condition to first-stage of the U.S. Open qualifying,” he said. “We are considering not applying the condition to our Wednesday qualifiers. A vast majority of the players that play in the Wednesday qualifiers are not PGA Tour members. But then when you get to the Monday qualifiers, the second qualifier for an open tournament, the vast majority are our members. And the concern here is just one of numbers,” he continued.
“Having a little more time for players who are trying to qualify for PGA Tour events to make an equipment adjustment is the consideration there, and we'll probably decide this in November when we know a little bit more about when equipment is actually -- it's one thing for the manufacturer to make equipment available to a Tour player; it's another thing for when a manufacturer will have product distributed at retail when you have hundreds and hundreds of qualifiers out there trying to get clubs. So we've got to make sure that the equipment is available to those people first,” he said. “My guess is we'll make some adjustment in 2010 as a transition year, but we'll think more about that and decide in November.”
Another example that the rules don’t always have to apply or at the very least, it can be determined when they may or may not...
CLEAN AS A WHISTLE: According to PGA Commissioner, Tim Finchem there were over 1,000 drug tests administered in the last year. And the results are conclusive. “There have been no suspensions because of doping,” he said. “And again, I'll just say, it's not going to surprise me if we have some issue, but I think what's clear is we do not have a doping problem. Having an issue or two as we go forward does not mean we're having a problem. It could mean a lot of things. But knock on wood, we're very pleased at this point in time.” Are you listening IOC? But upon further clarification, the Commish said, “I said we have had no positive tests with respect to performance enhancing. We may have had some test results that trouble us in other areas that we treat in a different bucket. But we don't publicize those. We treat those as conduct unbecoming.”
ALL IS WELL: Finchem gave an update on the tournament sponsorship front to the media last week. “It's hard work right now,” he said largely pointing the finger of blame at the economy. “It's largely a reduction of budgets,” he explained. “It's companies saving dollars, and two areas that you can save without firing anybody is reducing entertainment and customer communication activity and advertising. And both of those things hurt us. The advertising budgets are way off around the country, therefore the networks have a harder time selling inventory. So our big two struggles right now are at the tournament level selling hospitality because of shrinking budgets, and then our television product, like every other sport selling.”
SIGN OF THE TIMES: The Acushnet Company, parent to Titleist, FootJoy and Cobra Golf and based in Fairhaven, MA., has reduced its workforce by another 77 employees, according to a local media report. The reductions are believed to affect Ball Plants II and III, located in North Dartmouth and New Bedford, MA., respectively, and at its Fairhaven distribution center. The employee adjustments are being categorized in response to changes in golf ball demand. For those counting, it marks the fifth round of job cuts at the Acushnet Company since May 2008. While the Titleist, FootJoy and Cobra Golf companies represent the larger brands in the golf industry, this news shouldn’t necessarily be interpreted that business is softer for the trio than it is for others. Rather its probably a case of that Acushnet is being (painfully) proactive in responding to the market conditions while others may be living in some form of denial...
JUST DO IT: Nike Inc (NKE: NYSE) recently concluded its 2009 fiscal year and reported its operating results to shareholders and Wall Street analysts. The Beaverton, OR., based behemoth doesn’t provide a breakdown of its Nike Golf results specifically but during the conference call it did offer some insight into how the business has fared for the period ending May 31, 2009. Don Blair, Chief Financial Officer, Vice President at Nike Inc. stated Nike Golf revenues were down 11% and it posted pretax losses for the year.
Nike Golf’s results are reported under its “Other” category, which includes Converse, Cole Haan, Hurley and Umbro. The segment delivered $2.5 billion in revenues back to the parent company in fiscal 2009. According to Blair, Converse sales were up 26% to $915 million on the year. Hurley also showed double-digit growth, up 19% with revenues of $200 million. Umbro posted sales of $174 million, Blair revealed. However, the sales of the other two businesses, Cole Haan and Nike Golf were not divulged by the CFO.
ROUND AND ROUND WE GO: The national rounds played report was released for the month of May. It might catch some interested bystanders by surprise that the numbers were consistent with a year ago, with the notable difference between the periods being the presence of a recession in 2009 and a subsequent higher unemployment rate versus a year ago. According to the data provided by Golf Datatech with the assistance of the National Golf Foundation and the PGA of America, May produced a slight up tick in the amount of golf played, 0.9% over May 2008. Inside the numbers, Datatech said public access venues saw rounds played grow by 1.3%, while private courses were off 0.7% throughout the country.
On a year-to-date cumulative basis, Golf Datatech reported an increase of 1.6% over the prior year in the amount of golf played at the recreational level. The trend towards pay per play at public access courses in the U.S. in the first five months of 2009 appears to be where there is some strength. According to Golf Datatech, public courses are up 1.9% over 2008 levels, while member only facilities have registered a 0.6% improvement in that time. The report doesn’t provide a breakdown of revenue generated thus the improvement of the total number may have been influenced by a possible price reduction as a stimulus measure at the public course level.
WE SALUTE YOU: Bridgestone Golf said it will donate 800 dozen, logo golf balls for use during its annual National Tee It Up For The Troops Day. It is the fifth time Bridgestone Golf has partnered with the charity. Every year, National Tee It Up For The Troops Day is held on the Friday closest to September 11th, which this year falls on a Friday. At participating event locations golfers will receive a free sleeve of Bridgestone golf balls and it is encouraged that players voluntarily match 10% of their greens fees in a donation. Bridgestone Golf’s 2009 donation, it said, represents a value of nearly $25,000 bringing the company’s 5-year contribution to nearly $100,000 of products and services.
TEE IT UP FOR THE TROOPS, Inc. (TIUFTT) is a non-profit organization dedicated to supporting the fallen and disabled members of the Armed Forces and their families through various golf centric programs designed to show support for veterans and active duty military men and women.
“TEE IT UP FOR THE TROOPS does a great job of using golfers’ love for this great game to show support for the bravest of American men and women,” said Dan Murphy, Senior Director of Marketing, Bridgestone Golf, Inc. “We are pleased to provide product and manpower to help ensure that their events remain a success.”
Bridgestone first became involved by providing equipment for driving ranges built for troops in Afghanistan and Iraq in 2005. In addition, it has remained the primary golf equipment supplier for fundraising events throughout the country, donating equipment as prizes annually.
“Bridgestone Golf was the first major golf supplier to step up to the tee in support of our TIUFTT National Day of Golf,” said JB Ball, President of TIUFTT, and the father of a soldier. “We are honored that Bridgestone continues to partner with us. With their help we have been allowed to provide scholarships, transportation, housing and athletics to those currently serving and their families, and to a variety of veterans programs to say Thank You to ALL who serve.”
THE BIG BOARD REQUIRES CALLAWAY TO GET SHAREHOLDERS TO APPROVE ITS RECENT FINANCING: Callaway Golf (ELY: NYSE) has called a special meeting for its shareholders. The company recently completed a $140 million convertible preferred stock offering, however the New York Stock Exchange has informed Big Bertha that it requires shareholder approval even though the deal is already completed. At the upcoming meeting, September 10, 2009, the shareholders will be asked to vote to approve the private offering. The convertible feature in the deal represents the potential of additional shares of Callaway common stock being issued, which would be dilutive to current owners of the stock. If shareholder approval is not obtained by September 13, 2009, then the company is subject to certain penalties.
Its highly unlikely that the company won’t be approved with the vote, but its worth pointing out that its stock price closed last week at $4.89 a share, a new 52-week closing low for it. The current market capitalization (number of shares outstanding multiplied by its stock price) values the business at a little more than $315 million. The preferred offering, which came about so that Callaway could pay down its credit line since it was feared it may fall out of compliance with the terms of its credit facility, now represents nearly half the value of the business or perhaps more if the stock price continues to free fall. For those who are inclined to talk up another round of potential take over rumors, any such deal would require the inclusion of the $140 million in the buying price. Therefore, it might cause some institutional shareholders to pause momentarily before casting their vote in favor of the company’s request to approve its recent deal as the NYSE has requested.
STOCK WATCH: There was some good news and bad news last week. First, we’ll get the bad out of the way. Unemployment levels reached a 26-year high, which caused stock prices to go into a tailspin. Fortunately, the markets closed Friday in observance of the Independence Day holiday thus making it a four-day trading week. For the week, the Dow finished down 1.9 percent; the S&P 500 lost 2.5 percent; and the Nasdaq fell 2.3 percent.
Now for some good news. The Dow Jones Industrial Average finished the second quarter of 2009 at 8,447.00, leaving the blue chip index up 11% for the period. The advance marks the first quarterly gain for the Dow since the third quarter of 2007 and it’s biggest since the fourth quarter of 2003. The S&P 500-stock index closed the quarter at 919.32. It jumped 15% in the second quarter, its best performance since the fourth quarter of 1998. The Nasdaq Composite Index finished at 1,835.04, leaving it up 20% in the second quarter.
Meanwhile, the body count continues for the banking business as the number of U.S. failures has reached 48 in 2009.
A ROOM WITH A VIEW: The Old Course Hotel, Golf Resort & Spa, has added a unique rooftop deck as a new venue for guest and visitors to hold private functions and parties in the unforgettable ambient surroundings.
The rooftop deck completes the luxurious fourth floor at the prestigious hotel as the destination area in the resort for deluxe dining, relaxing with drinks and for holding private social parties. It compliments the Roadhole restaurant, the Road Hole Bar.
“We are extremely excited about this unique and outstanding additional feature of our resort, which with its breathtaking views of the Old Course, West Sands and Firth of Forth,” said Debbie Taylor, Managing Director at the Old Course Hotel. “ I am confident it will be a must visit destination with residents, visitors to St Andrews and hotel guests alike.”
DISCOVER AMERICA: In an effort to spur leisure travel in the United States during the fall and winter months, the U.S. Travel Association is partnering with the Travel Channel to create a weeklong primetime promotion encouraging consumers to experience the many extraordinary destinations our country has to explore. The promotion will take place the week of September 14.
The block of U.S. programming will re-introduce Americans to the travel opportunities across the nation, in their region and even in their own backyard. “Through this week-long promotion, we’re looking to remind people of the many remarkable destinations around the country, and heighten the appreciation for travel as being vital to both our well-being and the strength of our economy,” said Roger Dow, President and Chief Executive Officer of the U.S. Travel Association. “Partnering with the Travel Channel is a great vehicle to promote travel within the United States. Despite the tough economy, travel intentions through October are up significantly compared with last year at this time.”
THE INFORMATION CONTAINED IS BELIEVED TO BE RELIABLE, BUT IT IS NOT GUARANTEED. THE OPINION EXPRESSED IS THAT OF TERRY MCANDREW AND SHOULD NOT BE CONSIDERED A SOLICITATION TO BUY OR SELL SECURITIES IN ANY OF THE COMPANIES DISCUSSED WITHIN THIS NEWSLETTER. CONTENTS OF THIS NEWSLETTER MAY NOT BE REPRINTED OR REBROADCAST WITHOUT THE EXPRESSED WRITTEN CONSENT OF TMAC GOLF
Last Updated (Thursday, 28 January 2010 10:23)
VOLUME 12, NUMBER 26
Web Street Golf Report
VOLUME 12, NUMBER 26
Monday, June 29, 2009
DALY DELIVERS! Despite a miserable economy, John Daly is able to do something (or so he says) for a company that nearly everyone else is unable to accomplish on their own in 2009: Growth. Consider this under the heading of questionable tastes, but big John, who is slimming down just at the right time to help sell an unusual clothing line. Perhaps the golf industry should take notice as it is mired in a slump of its own.
The Wild Thing is down to a 1,200 calorie a day diet due to waistband that he had surgically inserted earlier this year to shed his unwanted girth. According to Daly, he currently weighs 210 lbs and his goal is to get down to 190 lbs. Meanwhile, his new makeover of sorts is apparent through a clothing deal he has with Loud Mouth. His pants speak for themselves (see for yourself below) and apparently it is reverberating with some consumers.
“ I had a meeting with Larry Jackson, who is one of the partners from scouting in Memphis, and they were up 78 per cent in the month of May,” Daly said this week at the BMW International Open in Eichenried, Germany. “ His projections in June are going to be just as good. So we are having a blast. We should have some new styles out end of August or end of September for next year's stuff,” he added. “I didn't realize that the company was over eight years old. I feel like I've helped generate the sales go up. I mean, it's just something different.”
Different may be an understatement with regard to the look, but it appears the world can brace itself for more. “We are coming out with a Loud Mouth golf bag so it will be interesting to see what it looks like with a lot of the different styles of pants on the golf bag. So that will be cool to see,” Daly said. “ The shorts and the kilt and the skirts will be out for the ladies I think in August.”
Catch the video below of Daly at this year’s Italian Open and see for yourself. It appears he has captured the attention of the Italians with his new look.
DO HEAR WHAT I HEAR? Seeing is believing. People learn in different ways. Visually is clearly one style. Unfortunately, in golf its impossible to see yourself swing. Video cameras have been enlisted as an extra pair of eyes for teachers and students to use but for the average player there are many days when no two swings seem alike... Experience is another tried and true way. Analysis is clearly the most popular method many in the golf industry revert to. However it can lead to the infamous paralysis by analysis. Auditory is another learning tool that frankly has been a popular if not proven method in the academic world.
Perhaps that is why a Yale professor with a Ph.D. behind his name came up with a system/method to help golfers improve by exploring sound on a real time basis while swinging a club. Dr. Robert Grober, a Yale University physicist, created a swing aid that can be used by any level of golfers. Many players focus on various data points throughout heir swing: shoulders; hips; legs; head; spine angle and of course hands to name just a few. If anyone of these items breaks down during the time it takes to swing a club the results instantly appear through the ball flight.
Grober has developed a system that turns a swing into sound. It isn’t constant but grows louder when the swing moves fasters. The system allows teachers and players to focus on tempo and rhythm to work in concert with the moving parts of a swing to try and find some harmony for best results.
Sonic Golf's System-1, the commercial entity behind the product offers an alternative way to approach the age-old dilemma of getting better. The application is perhaps best for teachers as they can approach students with a different method towards improving their swing. Just as individuals learn in different ways and at different rates, the system builds sound into real time while hitting a ball. Players and teachers will understand immediately, for example, when and where in their swings is the point when the greatest amount of speed is generated. It may be when the club is taken away from the ball at address or at the top of their swing. Maybe its just prior to contact or after the ball has left the club. There is a high probability that inconsistent consistencies are present in many recreational players swing tempos and it will be immediately identified through the properties of sound.
Two players at opposite ends of the spectrum have validated sonic Golf’s System-1. There doesn’t appear to be anything that is common between Vijay Singh and Charles Barkey’s golf swings. However, both men have used the system. Singh started using the Sonic Golf System-1 training aid last June and he went on to win The World Golf Championships-Bridgestone Invitational, The Barclays and the Deutsche Bank Championship en route to the season ending FedExCup bonus check of $10 million.
Sonic Golf System-1 was featured on the Golf Channel program The Haney Project: Charles Barkley. Hank Haney, best known as Tiger Wood's coach, was enlisted with the tasked of working on correcting Charles Barkley's infamous golf swing. In the second episode of the reality series, Haney choose Sonic Golf System-1 to help Sir Charles with the tempo and rhythm of his swing, which Haney described as "pretty much devoid of any rhythm." "It made a great impact. He said he hadn't hit shots like that in at least 10 years", said Haney. "It was fun to see the smile on his face." Barkley simply stated "Unbelievable," about the system and its impact on his swing.
For those looking for the path less traveled in working on improving their game or an alternative to finding a solution, Sonic Golf’s System-1 helps develop a fluid and consistent swing motion. For more information visit http://www.sonicgolf.com/
FIT TO A TEE: KZG Golf has introduced its new ‘Hybrid Scoring Set’ for mid-to-high handicap players. The set, which consists of the HSS-Irons coupled with the HSS-Plus hybrids, allows the professional clubfitter to form the ultimate custom set, according to the company.
“We are so excited about the HSS-Plus and the HSS-Irons, as together they give the distance that golfers crave plus enhanced accuracy due to a myriad of features for customization. The Professional Fitter will be able to ‘mix and match’ a set to perfectly enhance every golfers’ unique swing” reports Jennifer King, President of KZG. “The HSS combo is serious game enhancement technology.”
The HSS Plus #5 and #6 are interchangeable with the HSS Irons #5 and #6, KZG said thus enabling the professional fitter to create the ideal custom set. The HSS-Plus hybrids are cast in KZG’s proprietary alloy for bend-ability up to three degrees, the company said. Each hybrid contains two weight ports incorporating KZG’s Gravitational Force Technology with seven screw weight options to configure in draw/fade bias, swing weight, spin and center of gravity. The MSRP for an HSS-Plus hybrid is $149 in graphite.
The HSS-Irons are cast in a proprietary alloy giving a “feel of forged” and bend-ability up to four degrees, KZG said. The longer irons contain a very wide sole and cambered leading edge, similar to a hybrid. The sole width narrows in the shorter irons to a more traditional look, yet still maintains a large enough flange to prevent “fat” shots, the company promised. The MSRP for each HSS-Iron is $85 in graphite.
IT’S IN THE BAG! Summer might be the time when school is the furthest thing from peoples’ minds but not for everyone. The folks at Sun Mountain have been doing some homework and they’ve come up with a new stand and cart bag that features major college and university team colors and logos.
The company has agreements in place, to date, with 53 universities to including Michigan, Ohio State, Oklahoma and Georgia. More are expected to be added throughout the year.
Bag choices include a lightweight stand bag and a full-featured cart bag (based on Sun Mountain’s best selling C-130 bag) at $209 and $269, respectively.
“In the past golfers had to pick between a top quality golf bag and a golf bag in their college colors,” explained Sun Mountain President, Ed Kowachek. “Now folks can have it all – quality, performance, cutting-edge design and college colors.”
STEADY AS SHE GOES: Times change, as 2009 has proven, but in some instances it can also stand still. The Antigua Group, Inc. has reached a four-year extension of its license agreement with Tournament Sports Marketing of Waterloo, Ontario - Canada. This extension continued an 18-year partnership in the Canadian market between the two companies.
"We are extremely proud of our long-term partnership with Tournament Sports Marketing (www.tournament-sports.com) and their principle Mr. Kim Bauer. TSM has done a fantastic job in Canada with the Antigua brand since 1991 and over the past several years we have worked together on the Nancy Lopez brand (www.naceylopezgolf.com) in Canada as well," stated Antigua President Ron McPherson.
Under ordinary circumstances, the equivalent of status quo isn’t typically newsworthy. But we live in extraordinary times as many businesses have been forced to reexamined nearly every aspect of their operations due to the downturn in the global economy. Staying with business partners during these challenging times hasn’t always been the norm for many companies.
STOCK WATCH: Two in a row for the blue chip index. The Dow Jones Industrial Average finished down 1.2% for the week, while the S&P 500 slipped 0.3%. But the technology-laden Nasdaq managed to rise by 0.6% for the week.
The Dow is down 4.10% over the past two weeks and the last time it fell two or more weeks was the four-week drop that ended March 6. Meanwhile, technology appears to be the game as the Nasdaq is up five of the last six weeks and 14 of the last 16.
The second quarter ends on Tuesday and it remains to be seen how the books look for most of corporate America, specifically earnings potential. American consumers are saving more of their incomes than any time since 1993, which has some investors concerned. The reasons being spending habits are down and it is reflected back on company’s revenues and earning levels. he personal saving rate jumped to 6.9% in May, the Commerce Department said Friday, compared to 5.6% in April. The gain was partly attributable to one-time government payments to eligible seniors made under the Obama administration's economic-stimulus plan intended to spur consumer spending.
IS THE TREND YOUR FRIEND! Summer is kicking into full gear around the US and in years past that typical means with kids out of school, vacations are highlighted on calendars. This year it appears the lodging industry has plenty of room to welcome families and may even have a few deals to tempt those who might be sitting on the fence if the current stream of data continues its trend.
The U.S. hotel industry posted declines in all three key performance measurements during May, according to data from Smith Travel Research (STR), which has been the recognized leader for lodging industry benchmarking and research for more than 20 years.
In year-over-year measurements, the industry’s occupancy fell 11.8 percent to end the month at 55.7 percent. Average daily rates (ADR) dropped 9.8 percent to finish the month at US$97.03. Revenue per available room for the month decreased 20.4 percent to finish at US$54.05.
“Again in May, industry results were disappointing as they continued the downward spiral seen each month so far this year,” said Mark Lomanno, president of STR. “While demand has not gotten any worse over the past several months, we are becoming increasingly alarmed at the accelerating decline in average room rates. Despite the dismal results throughout the first half of the year, we continue to expect to see better numbers this summer, at least compared to the dreary results to date.
Highlights, if they can be classified as such from the Top 25 Markets include:
* None of the Top 25 Markets reported increases in any of the three metrics.
* Oahu Island, Hawaii, was the only market to report an occupancy decrease of less than 5 percent, falling 4.9 percent to 69.2 percent.
* Detroit, Michigan, led the occupancy decreases, falling 20.2 percent to 46.7 percent. Other markets to report occupancy decreases of 15 percent or more include: New Orleans, Louisiana (-16.8 percent to 57.0 percent); Houston, Texas (-15.7 percent to 57.0 percent); Chicago, Illinois (-15.6 percent to 59.0 percent); Phoenix, Arizona (-15.5 percent to 49.5 percent); Dallas, Texas (-15.0 percent to 49.1 percent).
* Nashville, Tennessee, reported the smallest ADR decrease, dropping 4.1 percent to US$90.69.
* New York, New York, was the only market to report a drop in ADR of more than 20 percent, falling 29.4 percent to US$201.13.
* Norfolk-Virginia Beach, Virginia, reported a 13.6-percent decrease in RevPAR (revenue per available room) to US$48.11, the smallest among the Top 25 Markets.
* Six markets reported RevPAR decreases of more than 25 percent: New York (-35.7 percent to US$159.82); Chicago (-29.5 percent to US$70.38); Phoenix (-28.6 percent to US$48.41); Detroit (-27.9 percent to US$36.72); New Orleans (-27.2 percent to US$63.19); and San Diego, California (-26.1 percent to US$77.49).
THE INFORMATION CONTAINED IS BELIEVED TO BE RELIABLE, BUT IT IS NOT GUARANTEED. THE OPINION EXPRESSED IS THAT OF TERRY MCANDREW AND SHOULD NOT BE CONSIDERED A SOLICITATION TO BUY OR SELL SECURITIES IN ANY OF THE COMPANIES DISCUSSED WITHIN THIS NEWSLETTER. CONTENTS OF THIS NEWSLETTER MAY NOT BE REPRINTED OR REBROADCAST WITHOUT THE EXPRESSED WRITTEN CONSENT OF TMAC GOLF
Last Updated (Tuesday, 02 February 2010 15:49)
VOLUME 12, NUMBER 25
Web Street Golf Report
VOLUME 12, NUMBER 25
Monday, June 22, 2009
HOLDING STEADY: The catch phrase making the rounds starting the year, was flat would be considered up. While it may have started out as a joke back in January, it appears few industries have been able to hang onto what they accomplished revenue wise or otherwise in 2009. However, the staging of the US Open has offered some bright spots, according to the USGA.
“The golf industry is having a tough time,” said Jim Vernon, USGA president. “We (USGA) certainly have felt the effects here and some of the revenue streams we would expect, particularly with corporate hospitality. No secret that we're having difficult economic times. Everybody, I know, is familiar with it,” he continued. According to a report in the New York Times, revenues from this year’s staging of the US Open are expected to be about 20 percent lower. In large part corporate hospitality is taking the blame, USA Today pointed out.
But Vernon said the event is on par with its financial performance from a year ago in one area, despite the world being a harsher place to make a buck today. “At Torrey Pines, the numbers were as high as $140 million of positive economic impact brought to the San Diego area last year,” Vernon said. “And I would expect that the number this year, both in Long Island and in the regional area, which should be just about as great.”
WIGGLE ROOM? There has been some back channel chatter for a few weeks that the USGA may not be implementing its new groove patterns into play starting next year. While it’s only been a rumor to this point, there isn’t anything to say that it won’t be happening either. The sticky point is that players and corresponding equipment manufacturers have to coordinate efforts to get the players ready for the upcoming change. To date its uncertain whether the PGA Tour players have taken steps to do so, since they are still competing with products that are deem conforming to the rules. Whether its a case of procrastination or not, its unknown. However, at the annual USGA press conference last week at the US Open the question was posed whether the new groove rule was going forward at the start of 2010.
“The implementation of the new groove regulations include a condition of competition for elite play, such as the PGA Tour,” said USGA president, Jim Vernon. “It is likely that if they were not to adopt it for 2010, we certainly would not adopt it for the U.S. Open either.”
Well that clears things up, doesn’t it?
BUYING TIME: On June 15, 2009, True Temper Sports, Inc. amended the existing forbearance with the lenders in its 2006 Restated Credit Facility, to extend it through July 16, 2009. The terms and conditions of the amended forbearance were substantially similar to those of the expiring agreement. As reported in the June 8th issue of Web Street, True Temper is at a cross roads, financially speaking with respect to its debt load. As originally reported in the March 23rd edition, the company failed to makes its principle payment ($20 million) on its credit line thus triggering a default on its covenants with its lenders. It was originally provided with 90 days to reorganize its financial house. In its last quarter, the shaft manufacturer reported sales were off more than 48% from the prior year, its bottom line lost $11.5 million and it is carrying $271 million in long-term debt.
TRY AND TOP THIS! While all the attention was centered on the US Open out in Long Island, a piece of news that is certain to generate a few double takes was released that may have gotten lost somewhat in the shuffle. The theme throughout the golf industry in the early going of the 2009 golf season is promotions. The equipment and retail segment of the industry has resorted to a variety of ideas to stimulate interest and hopefully demand towards sales as the economy continues to roll on what feels like four flat tires. While its been a buyer’s market despite a lack of enough interested parties, that may change for anyone interested in a new set of irons.
Cleveland Golf/Srixon announced a Free Irons Promotion. The way it works is that it allows customers, who purchase a new set of in-line Cleveland Golf irons between now and December of 2009, to be eligible to trade in the same set of used irons for a free set of any new Cleveland Golf iron models introduced between January of 2010 and December of 2011. The iron sets included in the promotion are Cleveland Golf’s CG7 irons, CG7 Tour irons, Launcher irons, HiBORE Xli irons, CG Tour irons and HiBORE Bloom Xli irons for women. To be eligible for this offer, customers must purchase at least a seven-piece set of irons from an authorized Cleveland Golf dealer, at their regular retail price, and register the set with Cleveland Golf. This offer cannot be combined with any other Cleveland Golf promotion.
So if Cleveland Golf comes out with something better between January of 2010 and December of 2011, eligible consumers can take advantage of it without worry of the cost. It’s a pretty large window of opportunity for avid players and a chance for the equipment company to catch the attention of players who use a competitor’s product. The company already has buy a driver and get a fairway wood for free, two round trip tickets for free when someone buys $500 worth of Cleveland/Srixon products running to generate some additional interest in its line.
OPEN DOOR POLICY? It wasn’t all that long ago where retailers were racing to open more locations. Now that seems like a pipe dream. At a recent investor presentation by Golfsmith (GOLF: NASDAQ) it reported that consolidation is the new trend. In 2009, total square footage of off-course retail held flat, while the number of total off-course doors decreased by 11.8%. It sourced the NGF’s The Business of Golf 2009 as the basis for the revelation. According to the NGF, there are presently 1,474 off course doors in business versus 1,671 in 2008. The difference is 197 locations, which a majority of the fall out is believed to come under the heading of “Mom and Pop” storefronts. The research does take into account new stores that have opened in 2009, which it listed as 133.
DIALING DOWN THE SPIN: For anyone wondering if equipment enhancements have reached their limits, fear not. Adams Golf (ADGF: NASDAQ), which previously introduced its Speedline driver that through its design created less drag and airflow turbulence, resulting in three to four M.P.H. faster club head speed and three to nine yards more distance, according to the company, has added the Speedline 9032LS to its offerings. The latest incorporates the same design features that promote a faster swing, but has a larger face (by 17.3 percent Adams said) area for more forgiveness and heel and toe scoops, Adams said, that are one and a half times bigger than the original Speedline driver. This also facilitates a better airflow attachment, the company claims that produces optimized launch conditions and offers 10 percent lower spin off the clubface.
"Consumers and tour pros alike told us over and over how impressed they were with the aerodynamic technology of the original Speedline driver," said Chip Brewer, President and CEO. "Now that we have advanced the ground-breaking design even further to deliver less spin, the 9032LS is poised to take their games to the next level."
Adams has also added a Speedline 9032Ti hybrid-fairway woods, which it said has a center of gravity that is 22 percent lower, a crown that is 25 percent thinner and a titanium body that is 40 percent lighter than conventional fairway woods. It features two 40-gram tungsten sole inserts and a weight port and Adams Golf guarantees an additional ten yards over conventional fairway woods for every golfer.
"This advanced fairway wood design came about after months of testing with the Tour pros," says Tim Reed, Vice President of Research and Development. "There was no disputing the faster ball speed and increased distance they saw when they put it into play. With the launch of the Speedline 9032Ti, everyday golfers will now be able to experience the longest and most versatile fairway wood we have ever designed."
The entire lineup of Speedline products will ship to golf shops beginning July 1st, Adams said. Both the driver and the hybrid-fairway wood feature the high Aldila VooDoo NV graphite shafts with Score Technology. The suggested retail price for the Speedline 9032LS Drivers is $469.99 and $379.99 for the Speedline 9032Ti Fairway Woods. Additional information on the technology behind the entire lineup of Speedline products can be found at www.speedlinechallenge.com.
HOPING TO TAKE FLIGHT: Nickent Golf has introduced the PIPE Dream Putter, which builds off its PIPE II line of putters. The newest version is designed, according to the company, to have a super high MOI with the addition of wings on the side of the club that shifts discretionary weight to the sides and to the back of the head. "All five models of the PIPE II were such a success and we never dreamed that we could improve them much," said Nickent President John Hoeflich. "But sometimes dreams become reality. Once we determined that the only way to improve the PIPE II was to create a putter with a higher MOI, we knew that wings were the only way to achieve that goal.” The PIPE Dream also features Nickent's patented Alternate Groove Technology face technology. The face insert is milled from anodized 7075 aluminum for a softer feel, and features an alternating groove design that lifts the ball at impact for a truer roll, according to Nickent.
The PIPE Dream will be available in three different head styles (06, 07 and 08) in late July of 2009, and will retail at $149. The Pipe Dream features a 3 degree loft and available in right-hand at 33", 34", 35" and 36" lengths. Belly and long versions are said to be available soon.
COMING TO AMERICA? GEL Golf, which manufactures GEL Groove Putters, has introduced GEL Fitting Centers into the UK. At the official launch at the East Berkshire Golf Club recently, sports biomechanist and putting guru Dr Paul Hurrion was on hand to teach the GEL Fitting Procedure to six PGA professionals. Hurrion, who first linked up with GEL Golf in 2008 to co-design the GEL Paul Hurrion Signature Range of Putters, has developed a unique fitting procedure, equipment and drills using the biomechanical and practical principles he uses when fitting Tour players. He has worked with Padraig Harrington, Rory McIlroy and Lee Westwood to improve their putting.
“At the GEL Fitting Centers, pros will be able to use the specially-designed tools to analyze a player’s putting stroke and allow him to accurately fit each and every golfer with the most suitable putter for the individual; not only will they ascertain suitable length, loft and lie but also blade against mallet, centre versus heel shaft and face-balanced against toe heavy,” Hurrion said.
With over 10 years of experience in sports biomechanics, Hurrion has established an independent testing company, Quintic, which provides a range of quality performance analysis software used at the highest levels in sport, health, and education across the world, and produces top-class coaching CDs.
“As a result of being specially fitted for a putter, golfers are both amazed and impressed as immediately they are able to see and feel tangible results for themselves. And with the GEL Fitting Procedure costing just £25, this is probably one of the best investments a golfer can make to assist his putting stroke,” he said.
A further seven centers will be opened in the next couple of months with more being rolled out across the country on an on-going basis.
Each will incorporate the use of his specially designed GEL equipment, which will include a fitting tool, mirror and ProStance aid as well as the Quintic 2009 Ball Roll Software designed by Hurrion. No word yet whether the company has plans to expand its fitting centers to the US.
STOCK WATCH: Stocks finished mixed last Friday, leaving all the major indexes with their first weekly loss since early May. The Dow lost 3 percent for the week, the S&P 500 index fell 2.6 percent, and the Nasdaq shed 1.7 percent. It was the first time since the week of May 11th that the three were all down in the same period. Meanwhile after the financial markets had closed the week for trading it was announced that three more banks in Georgia, North Carolina and Kansas were seized by the U.S. government making it a total 40 that have failed thus far in 2009.
BLOODY HELL: Whenever the US Open concludes, the next major will be held in Scotland at Turnberry. The Open Championship, as it is referred to across the pond, will be held next month and for anyone looking at making the journey, VisitBritain and Virgin Atlantic Airways have launched an exclusive partnership to offer transatlantic travelers some value packages for their potential summer visit. Consumers can explore deals and more at the website www.getmorebritain.com, where savvy travelers can take advantage of the strong dollar which makes Britain just a little more affordable than a year ago. The ‘Get More Britain For Your Buck’ campaign extends now through Fall 2009.
WILL BIG BROTHR HELP? William Delahunt (D-MA) and Roy Blunt (R-MO) recently introduced the "Travel Promotion Act of 2009." Its purpose is to create thousands of new jobs and boost economic growth nationwide by attracting millions of new international travelers to the United States. The House of Representatives unanimously passed a similar measure in the 110th Congress, and this House introduction comes as the Senate debates companion legislation.
"The bipartisan Travel Promotion Act is the type of economic stimulus that America's economy badly needs," said Roger Dow, president and CEO of the U.S. Travel Association. "At no cost to American taxpayers, this common-sense legislation will help to create thousands of jobs and strengthen communities from coast-to-coast. Representatives Delahunt and Blunt are leaders with a vision to improve America's economy."
The "Travel Promotion Act" establishes a public-private partnership to promote the United States as a premier international travel destination and communicate U.S. security and entry policies. The legislation specifies that private sector contributions and a $10 fee on foreign travelers would pay for travel promotion from countries that do not pay $131 for a visa to enter the United States. Nearly every developed nation in the world charges entry and exit fees and spends millions of dollars to attract visitors. Overseas visitors are believed to spend an average of $4,500 per person, per trip in the United States. However, since 9/11 international travel has been down in part due to changing security policies and negative foreign press coverage. Oxford Economics estimates that a well-executed promotion program, as outlined in the "Travel Promotion Act," would attract 1.6 million new international visitors annually, create $4 billion in new spending and drive $321 million in new federal tax revenue. An analysis by the U.S. Travel Association believes this program would create nearly 40,000 new American jobs.
3467 and speak to someone to handle this matter if your unable to send your instructions via email.
THE INFORMATION CONTAINED IS BELIEVED TO BE RELIABLE, BUT IT IS NOT GUARANTEED. THE OPINION EXPRESSED IS THAT OF TERRY MCANDREW AND SHOULD NOT BE CONSIDERED A SOLICITATION TO BUY OR SELL SECURITIES IN ANY OF THE COMPANIES DISCUSSED WITHIN THIS NEWSLETTER. CONTENTS OF THIS NEWSLETTER MAY NOT BE REPRINTED OR REBROADCAST WITHOUT THE EXPRESSED WRITTEN CONSENT OF TMAC GOLF
Last Updated (Wednesday, 27 January 2010 16:28)
VOLUME 12, NUMBER 24
Web Street Golf Report
VOLUME 12, NUMBER 24
Monday, June 15, 2009
MONEY SWAP: The economy has gotten a lot of press in the last year and half. Like it or not, its been a foe to just about every industry. Some people believed prior to the recession setting in that golf was immune to the influences of these kind of economic pressures. Some believed the demographics often associated with the affluent consumer involved with the game was above the financial hazards others couldn’t avoid. Meanwhile, Bernie Madoff came along last December and added insult to injury for those who many believed couldn’t be touched. Predicting consumer behavior is at best another form of speculation and in the investment world the spectrum often oscillates between fear and greed.
“Clearly, we’re looking at the state of the economy and the expectations as far as consumers are concerned, and I think scaling our expectations appropriately,” George Fellows, Callaway Golf CEO stated on July 30, 2008. “I’m also a believer that we’re seeing far too much negative talk about the economy even beyond where it really happens to be and because of that, I think we’re somewhat optimistic that the recovery for ’09 is very much going to happen. Indeed, if that were to be the case, we’re looking forward to ’09 as being a nice year for us.”
The playing field has been difficult, to put it nicely in 2009, despite the above referenced optimism by Callaway Golf’s President and CEO. Some challenges are apparent, while others are not quite so. Callaway Golf (ELY: NYSE) has exchanged some of the debt it has raked up recently in exchange for a potential equity stake in its business. The company originally announced it was shopping a $110 million convertible preferred stock deal to institutional buyers. Terms, such as dividend rate, conversion price and among others will be determined by negotiations between Callaway and the initial purchaser.
“I’m increasingly of the opinion that when the benefit of trash talking the economy and everything else that’s going on that currently exists on the part of all political parties, goes by the boards i.e., when the (November) election is over, I think that the tenor of the social discourse is going to begin to improvement and I think that will begin to have some effect on later in the year purchases and holiday,” George Fellows, October 30, 2008, “the economy in general I don’t think was nearly as bad; certainly not good, but nearly as bad as a lot of the talk would seem to indicate. We’re all facing a very uncertain period of time and I’m trying not to be Pollyanna about it, but I sincerely believe that again, as I mentioned earlier, the public tenure of conversations regarding the economy are going to take a shift when the election has passed us and there is no real incentive to talk badly about the economy and none of that is to say that we think the economy is in great shape, or for that matter that there are a great number of difficulties out there.”
Callaway’s private placement has come about as the company attempted to amend it line of credit facility that it has with eight banks. In its first quarter conference call to Wall Street analysts, Brad Holiday, Callaway Golf’s Senior Executive Vice President and Chief Financial Officer touched on the need for the amendment. “Our business is seasonal with our peak borrowing occurring during the second quarter of the year. Because of the decline in EBITDA (earnings before interest, taxes, depreciation and amortization) and the seasonal borrowings, we are in discussions with our banks to amend our credit facility to make sure we remain in compliance with the financial covenants under the facility. We believe we will have an amendment in place by the end of the quarter and will continue to proactively manage all spending and debt to preserve our liquidity,” Holiday told the street. The CFO sounds confident that the company would be successful at reaching appropriate terms that would be satisfactory. However, it appeared from an outsider looking in, that the cost of making the necessary changes were prohibitive and thus predicated a move back to the equity side of the balance sheet.
A check of Callaway’s debt at the end of June 2008, saw it had $135 million outstanding. Its latest filing with the Securities and Exchange Commission, indicate Callaway’s line of credit has accelerated to $210 million (plus approximately $8.5 million in outstanding letters of credit) as of May 31, 2009. In December 2008, Callaway purchased a GPS company (uPlay) and spent $10 million doing so and assumed liabilities of approximately $1.2 million. It has a $10 million investment in Top Golf, a high end driving range company. Big Bertha loaned the company $5.5 million in 2007 and in February 2008 provided collateral guaranteeing another $5.5 million in loans. Callaway also has a Manufacturing and Supply Agreement with Qingdao Suntech Sporting Goods Limited Company (“Suntech”), where Suntech manufactures and supplies certain golf balls solely for and to the company. Callaway has a loan agreement with Mauritius, Suntech’s parent company, in order to provide working capital for Suntech. It has extended a total of $3.2 million to its Chinese manufacturing partner. In the meantime the economy has worsened, consumer discretionary spending has contracted and the banking industry has been forced to tighten its lending practices.
In conjunction with its announcement of a preferred stock offering, Callaway also said that its Board of Directors elected to reduce its dividend on its common stock by $0.06 per share. This move would allow Callaway to retain an additional $15.2 million in cash on an annualized basis. It said it would save $11.4 million over the balance of 2009 with the decision.
Meanwhile, with the company reshuffling its capital structure, it made some brief statements regarding its current business. The company expects second quarter earnings will be similar to what it achieved in the 2009 first quarter, when it had sales of $271.9 million and net income of $6.8 million or $0.11 per share. A year ago in the second quarter, Callaway reported second quarter sales of $366 million and net income of $37.1 million or $0.58 earnings per diluted share.
“But whatever your view may be on the broader economic issues, golf as an industry will recover as the economy does and those players who position themselves properly and focus on the longer term will benefit from the shakeout. We are quite confident Callaway will be one of those clear beneficiaries. I really believe that the golf industry has gone through or is going through a fairly short-term hiccup because of the economy,” Fellows, April 30, 2009.
History will show this has been unprecedented times in the United States, if not throughout the world. Economies have plunged into recession before but never when the banking industry has been under the microscope. For example, in 2009 37 US banks have already been taken over by the FDIC. Capital preservation has been a redundant theme on Wall Street ever since the onset of the recession largely considered to have hit its full stride last September. It appears Callaway Golf is just now getting the message, largely prompted by its inability to renegotiate its credit facility on favorable terms. It’s worth noting per Callaway’s SEC filings that its weighted average interest rate is approximately 2.13% on its line of credit facility. Wall Street wasn’t impressed by the company’s announcements. Callaway Golf shares fell $1.36, or 19%, to close at $5.92 in trading on the NYSE the day after the news surfaced. For the week it ended at $6 per share.
“I believe that we may very well be bouncing along the bottom a bit now and when the election is over, I think we will begin perhaps a slow, but nevertheless, recovery period. If that in fact happens and the fact that we have about five months or so before most of the golf industry reopens, we’re not unhopeful about the quality of '09. We add that together with the fact that our product line has finally gotten to the point where we are comfortable, that we will have a strong offering each and every year going forward, with particular emphasis on the strength of our ‘09 program. We’re somewhat hopeful for ‘09. We’re feeling quite a bit better about it than we were perhaps just a month or so earlier,” George Fellows, October 30, 2008.
Following up the day after its announced intensions, Callaway said it has priced and increased by $15 million its previously announced private offering of preferred stock. Callaway will issue $125 million principal amount of 7.50% Series B Cumulative Perpetual Convertible Preferred Stock. The Company also granted the initial purchasers a 30-day option to purchase up to an additional $15 million of the preferred stock, which could push the aggregate amount up to $140 million. The preferred stock will be resold to a group of qualified institutional buyers pursuant to the Rule 144A exemption from registration under the Securities Act of 1933, as amended. The sale of the preferred stock is expected to close today, June 15, 2009.
The devil is in the details, as the old saying goes. Callaway will pay cumulative dividends on the preferred stock from the date of original issue at a rate of 7.50% per annum. So the anticipated annual savings by cutting its common stock dividend will essentially go towards the new class of shares. Based on $125 million at 7.5%, the annual expense is $9.375 million and if the deal reaches $140 million then the new dividend will cost Callaway $10.5 million annually. Therefore, the anticipated $15.2 million it outlined by cutting its dividend is somewhat immaterial as a major portion of it has largely been repositioned elsewhere.
The conversion rate into common stock was listed as $7.05 per share. So the deal works like this, investors will be paid 7.5% rent on their money (a handsome rate compared to 30 year bonds/mortgages) while watching Callaway Golf’s business to determine whether to take advantage of the conversion feature into common stock down the road. Callaway does have a clause that forces a mandatory conversion of some or all of the preferred stock. It can do so if on or prior to June 15, 2012, Callaway’s common stock has exceeded 150% of the conversion price for at least 20 of the 30 consecutive trading days ending the day before the company sends the notice of mandatory conversion. This would imply the stock is trading above $17.63 a share for the time period described.
Callaway estimates that the net proceeds from this offering will be approximately $119 million as the deal stand now. It intends to use it to pay down the Company’s revolving line of credit, which Callaway believes will enable it to retain the credit facility’s currently favorable terms and avoid the need for an amendment of such terms.
So the net effect is that Callaway pays down its credit line, which remains completely intact but added to its cost of money by agreeing to pay 7.5% versus the weighted average of 2.13% on its existing line of credit. Existing common stock shareholders have their dividend cut and face a potential dilution of their investment. In the event the preferred issue is converted into common stock, it increased the number of shares outstanding by more than 17 million, which will influence the earnings per share calculation off its current 64.5 million base.
TAKING IT TO THE NEXT LEVEL: Trends come and go. For that matter so do economic cycles. Sustaining those ups and downs are part and parcel of what it takes in business to stay in business. The Antigua Group, Inc.,-celebrating its 30th year in operation, has found a way to stay a step or two ahead of the pace. Its doing it again this time, with a feature on it’s Golf Summer 2009 E-Catalog that makes the transition from paper to a more green delivery online with ease by including the PageFlip feature.
Suppliers can navigate to the company website at www.antigua.com and click on the "Golf Summer 2009 E-Catalog" icon at the bottom left of the front page graphic. An online catalog will open in the user's browser and from there it is possible to mimic the experience of a physical catalog while being in the online virtual world. Also, by using the online catalog there are product views and content available that would never be possible with a traditional, paper source. For example, a zoom feature increases the size of any portion of a page with significant clarity that enables viewing detail of the product. There are also live links embedded in the pages to enable visits to other related web content and video demos for product. Animation examples also make the virtual experience come to life in a way that is not possible with two-dimensional paper catalogs. These features came about as a result of the insistence of employees, which lead the company in 2008 to form the Antigua Green Team.
"Antigua as a company and its employees are committed to lessening their impact on the planet in many ways and the new catalog is part of that effort," said company president Ron McPherson.
THE NAME GAME: J.Lindeberg is offering the new "J.Lindeberg Art Polo / Camilo Villegas Collection" at this week’s US Open. Villegas will be wearing the collection at the tournament that will be available at an exclusive list of launch partners starting in mid June. According to the company, collection centers around innovative technical shirts, with unique art-work screen-printed on the garments, which promises to be something completely new and unique to the golf world.
ANOTHER ONE IN THE FOLD: Nike Golf has added Amanda Blumenherst, a three-time national collegiate player of the year and winner of the 2008 U.S. Women's Amateur Championship, to its Tour staff. It’s believed that she signed a multi-year agreement and will represent Nike Golf in clubs, balls, apparel, footwear, glove, bag, headwear and accessories.
“I’m very excited to be representing a company that focuses on the athlete in developing products that help them perform their very best.” Blumenherst stated in a company press release. “I switched to Nike Golf clubs last year and I have been very pleased with them. Now, I’m looking forward to representing Nike from head to toe.”
Blumenherst made her professional debut at the Michelob Ultra Duramed Futures Players Championship last week but has competed in five LPGA events in the last three years as an amateur including the U.S. Women’s Open in 2006 and 2007 where she finished tied for 10th and 50th, respectively.
SIDENOTE: During a recent Barclays Investor Conference Presentation, Don Blair, Nike’s Chief Financial Officer revealed Nike Golf’s annual sales. Nike (NKE: NYSE) doesn’t regularly divulge its golf business sales within its reporting back to Wall Street, as it falls into its “Other” category that includes other businesses. “When we decided to enter the golf business, we could've bought one of our competitors or we could've built the business organically. We decided to build it organically and we've built a $750 million golf business and we've been cash positive the whole way and we've made money,” Blair said.
FINDING A WAY TO GET A LITTLE MORE: Graphite Design, maker of some of the most widely played premium shafts on the PGA Tour, announced the introduction of the Tour AD YSQ shaft. The initials stand for Accuracy and Distance. The company said it is the new updated version of Graphite Design’s successful YS+ series of shafts, considered by some to be an icon in golf shafts within the golfing industry for the last ten years.
“During Trackman launch monitor testing, we have seen a considerable increase in ball speed of 3% to 5% equating to longer and more accurate drives,” said Tim Gillis, vice president, sales & marketing, Graphite Design. “That means a 220 yard drive could now go 226 yards or more when using the Tour AD YSQ shaft in your driver, fairway and hybrid!!”
With new developments in driver technology and as shaft materials have evolved, Graphite Design said the Tour AD YSQ has taken all the tour-proven features of the YS+ and added the benefit of improved technology to enhance the performance of today’s larger drivers.
PULLING OUT THE STOPS: Golf is making its last push for inclusion into the 2016 Olympic Games. Annika Sorenstam and 2010 European Ryder Cup captain Colin Montgomerie are joining representatives of the International Golf Federation in Lausanne, Switzerland today. Sorenstam, who serves as a Global Ambassador in support of the IGF’s effort, and Montgomerie along with Tim Finchem, PGA Tour Commissioner, LPGA of Japan President and World Golf Hall of Fame member Hisako “Chako” Higuchi, IGF Co-Secretary Peter Dawson and IGF Executive Director Ty Votaw for the presentation. Dawson and Votaw have been coordinating golf’s Olympic bid.
“We feel it is very important for the IOC Executive Board to be able to personally hear from two of the game’s most highly respected players in Annika and Colin,” Votaw said. “We will also be presenting a film featuring 16 of the game’s most prominent players including current World # 1 ranked Lorena Ochoa and Tiger Woods, as well as IGF Global Ambassador Jack Nicklaus describing the compelling reasons why golf should be reinstated as an Olympic sport after an absence of more than a century.”
Golf is one of seven sports being considered for inclusion starting with the 2016 Games. The IOC Executive Committee is expected to recommend two sports in August to the IOC membership to vote on for the 2016 Olympic Program. The IOC's final vote will take place in early October at the 121st IOC session in Copenhagen, Denmark. The host for the 2016 Games will also be determined during this session. The candidate cities are: Chicago, USA; Madrid, Spain; Rio de Janeiro, Brazil; and Tokyo, Japan.
In related news, the IGF was voted in as a member of SportAccord, formerly the General Association of International Sports Federations (GAISF), during the Sportaccord conference held this past March in Denver. SportAccord, which was launched in 2003 and is owned by the GAISF, the Association of Summer Olympic International Federations and the Association of International Olympic Winter Federations, is an annual gathering of 1,500 leading representatives from international sport federations from around the world. Dawson and Votaw attended the meetings in March.
STOCK WATCH: U.S. stocks eked out small gains for the week. The Dow Jones Industrial Average was higher by 0.4%. While the move may not sound like much, taking a broader look at it does offer a slightly different perspective. The gain last week pushed the blue chip index into positive ground for the year, up 0.3%.
The broader Standard & Poor's 500 Index managed to post a 0.7% gain for the week and it is up 4.8% for the year. Meanwhile, technology has been the place to be. The Nasdaq Composite Index closed last week at 1,858.80, up 0.5% from the week before. However, the Nasdaq is up nearly 18% for the year so far.
For now the rally may be stymied as crude prices trade above $72 a barrel give investors reason to pause and perhaps lock in gains. Markets will have some economic data coming in this week to digest. On Monday a manufacturing survey for the New York region, followed by the housing index from the National Association of Home Builders will offer some clues. Next up on Tuesday are May’s producer prices, housing starts and industrial production numbers. All eyes will be on May’s consumer-price index set to come out on Wednesday, which will be fuel towards an argument over whether to be wary of inflation. Jobless claims and latest read on leading economic indicators are out on Thursday, which will be further data points for economists and analysts to pour over to support their theories.
BACK TO SCHOOL! Due to popular demand, those words haven’t been used in quite some time it seems, but that is the reason being listed for the extension of the “Best Ever Golf School Package” at Pawleys Plantation in Pawleys Island, S.C. Perhaps the continuation is warranted through September 9, 2009, due to a recent write up in this month's edition of The Costco Connection. It features Phil Ritson-Mel Sole Golf School and directs readers to the school Web site at www.ritson-sole.com.
The package is $799 per person, based on double occupancy, taxes inclusive. It includes three nights accommodations in a one-bedroom suite, two rounds of golf with carts on Pawleys Plantation’s signature Jack Nicklaus course, three breakfasts, and three-days of golf instruction at the aforementioned Ritson-Sole Golf School, known for offering top quality instruction at an affordable price.
“This package is one of the most popular ever offered by Pawleys Plantation,” said Jann Walker, director of marketing at Pawleys Plantation. Golfers have really responded to the philosophy of our golf school (with emphasis on proven fundamentals) and Mel's commitment to offering top-notch instruction at reasonable rates. Mel’s goal is to grow the game of golf. Game improvement equals player retention. People shouldn't have to pay high prices for top quality instruction because that makes learning the game and game improvement unaffordable for many middle-income people. So Mel breaks down this barrier by offering a first class golf experience at a price most people can afford.”
Class size is limited to four students to ensure plenty of individual attention. Each class stays with its own instructor throughout all parts of the full swing and short game. “We are pleased to team up with the Ritson-Sole golf school to offer the ‘Best Ever Golf School Package,’” said Walker. “Golf Magazine has consistently reported that the Ritson-Sole Golf School is one of the best values among America’s top schools. This special package delivers an even greater value. At other top 25 schools, students would pay three to four times as much. Partner that with our award-winning Jack Nicklaus signature course and you have a golf package that truly lives up to its name.”
Additional information is available at www.pawleysplantation.com or by calling Pawleys Plantation at (800) 367-9959. More information on the Phil Ritson–Mel Sole Golf School is available by calling (800) 624-4653 or online at www.ritson-sole.com.
Last Updated (Wednesday, 27 January 2010 16:26)
VOLUME 12, NUMBER 23
Web Street Golf Report
VOLUME 12, NUMBER 23
Monday, June 8, 2009
A FEW NEW WRINKLES? It appears Callaway could be dipping its toe into the adjustable weight waters. Customization has become the platform many equipment companies have taken to promote premium pricing in products and Big Bertha is showing signs it maybe making an adjustment of its own.
The company filed a patent application, US Pub. No. 20090143167 titled “Golf Club Head With Adjustable Weighting, Customizable Face-Angle, and Variable Bulge and Roll Face.” The application summarizes the invention as a customizable golf club head that includes among other items “a plurality of removable weight members with each of the plurality of weight members positioned within a pocket of the plurality of pockets.”
In the application Callaway stated, “The primary purpose of this invention is to effectively incorporate the following three design features into a driver design. First, visible and removable weights to adjust the center of gravity of the club head using a new and novel method of affixing these weights to the club head. Second, different height skid plates on the sole to alter the club's face angle at address (as it sits naturally on the ground). Third, a unique face design using bulge and roll values at the center region of the face for hitting straighter and more consistent shots, while having a different bulge and roll at the edge of the face to promote a more pleasing appearance to the golfer.” Among the weights it described, as being interchangeable for its invention were 15, 10 and 5 grams. It appears by the illustrations Callaway submitted it would offer a heel weight port just behind the location of the hosel. No guarantees this will ever find its way into the marketplace, but steps are being taken to protect itself just in case.
WHAT TO WATCH FORE: True Temper has a deadline looming that just might be a turning point in the company’s history. Back on March 16, 2009, the company did not make the principal payment then due on its revolving credit loans, in an aggregate amount of $20.0 million ($17.0 million in borrowings and $3.0 million in outstanding letters of credit) that was due to the lenders under the 2006 Restated Credit Facility. The failure to make payment entitled the lenders to immediately accelerate the repayment of all other amounts borrowed. True Temper negotiated a 90-day forbearance with all of the lenders under which the lenders agreed not to exercise their rights as a result of this default through June 16, 2009, provided the Company adheres to the requirements of the agreed terms. In essence True Temper bought (no pun intended) itself some time to attempt to get its financial house in order. It hired the investment-banking firm, Lazard Middle Market to assist it in exploring alternatives to enhance its capital structure, or put another way, a solution to its current financial problems. According to True Temper’s latest filings with the Securities and Exchange Commission, it has listed $271.7 million in long-term debt outstanding.
MARKET $IGN$: With the onset of the global recession, several markets have experienced a haircut of sorts. While the focus during these unsettling times has been on value, even used equipment can’t escape contraction.
Consumers purchased $969 million in used sporting goods equipment in 2008, according to a report just released by the National Sporting Goods Association (NSGA). This is the 11th study done by the Association on the used equipment market. The used sporting goods equipment market had exceeded $1 billion the previous two years: $1.08 billion in 2007 and $1.01 billion in 2006.
“With the rise in the number of sporting goods stores that emphasize used equipment sales and the growing use of the Internet, it is important for NSGA to look at the impact of these changes in channels of distribution,” NSGA Vice President of Information & Research, Thomas B. Doyle said. “The purchase of used equipment is a two-edged sword. It may take away from new equipment purchases initially, but it also may provide the entry point for future purchasers of upgraded equipment.”
Purchases of used equipment for the outdoor sports (camping, fishing and the shooting sports) reached $636 million, the largest single category. Versus 2007, the outdoor sports category fell 5%. Used exercise equipment (the second largest category) had purchases of slightly more than $158 million, a 24% drop versus the previous year. Looking at golf equipment, used clubs in terms of sets were down 13% in dollars from 2007, while individual clubs were down by 18%, the reported stated.
The report provides information on the number of units sold, average price and total dollars as well as place of purchase information including traditional channels of distribution as well as online/Internet purchases and purchases from private individuals.
TIGER THOUGHTS: Tiger Woods seems to have an answer for nearly every challenge he faces on the golf course. While he doesn’t always come out victorious, he certainly wins his fair share of battles. But he doesn’t have an answer for one challenge that golf is currently facing. The world’s #1 player was recently asked for his opinion on how he would go about growing the participation base for golf.
“ A lot of kids aren't being introduced to the game of golf by caddying,” he said. “I caddied growing up. A lot of older players on the Senior Tour, that's how they all learned to play. You don't have that opportunity anymore. The golf cart has really hurt the game,” he continued. “It's becoming more difficult to introduce kids to the game. The First Tee has done a great job of that, and we need more of that, more institutions around the country to adopt the philosophy that they have, and hopefully that will get more kids into the game and being excited about it. But as far as growing the game, well, it's hard to. One of the things is with our economy changing, you know how expensive this sport is.”
A CHANCE TO GET IT FREE: Rocco Mediate and Phil Mickelson want to put a new Callaway driver in your bag for free. Anyone who purchase one of the company’s three drivers – the Big Bertha Diablo, FT-9 or FT-iQ – at any Golfsmith store across the country will have the purchase price fully refunded by Golfsmith if either player wins the U.S. Open. The promotion runs to June 17th.
“This event gives golfers two great chances to get their Callaway driver purchase fully refunded with two of the best golfers in the world,” said Martin Hanaka, president and CEO of Golfsmith. “Coupled with Callaway’s current promotion that provides a fairway wood or hybrid for $1 with the purchase of a new driver, there’s no better time to buy than right now at Golfsmith.”
Both players should arrive at the tournament with some good memories prior to the start of it. Mediate’s memorable performance throughout last year’s U.S. Open at Torrey Pines is still fresh in the minds of many sports fans and will certainly be revisited by NBC when it broadcasts this year’s event. The first and last time the US Open was held at Bethpage Black, Tiger Woods came out on top but Phil Mickelson finished second at this venue. If Mickelson were to come out on top its certain to be an emotional victory as his recent absence due to his wife’s health issues has been highly documented by the media. “We’re thrilled that Callaway’s three latest and greatest drivers, as well as two of our staff professionals, are featured to generate excitement among Golfsmith’s customers,” said Brian Groves, Vice President, Marketing, Callaway Golf. “With Father’s Day approaching, Phil and Rocco may have more fan support than ever before at this year’s U.S. Open.”
To learn more about Golfsmith’s promotion with Phil Mickelson, Rocco Mediate and Callaway Golf, visit www.golfsmith.com/usopen. This promotion is available only in Golfsmith’s U.S. stores.
THE OTHER SIDE: In last week’s issue, PerformanceTrak, collaboration between the PGA of America and National Golf Course Owners Association reported April rounds played domestically were off 1.6% versus a year ago. The research produced by Golf Datatech with the cooperation of the PGA of America, National Golf Foundation and National Golf Course Owners Association has a different view of the month. According to the April rounds played report, it was higher by 1.4% and year-to-date it is above 2008 levels by 2%.
The anomalies between reports can be attributed to a poll of various compositions of facilities as well as depth used between the two in determining the results. In Golf Datatech’s report, public play is carrying the numbers of rounds played, as it was greater by 1.8% in April whereas the private club market was flat.
While it may be easy to dispute the validity of the reports due to the discrepancy, the real point behind both of them is that the amount of golf being played hasn’t cratered. Given the fragile state of the US economy, soaring unemployment rates and a general lack of confidence on display, it is somewhat impressive that golfers are continuing to show their support, at least early on by visiting golf courses with similar frequency as in 2008. Up or down 2% is generally considered a statistical tolerance for a margin of error.
Given the early revenue declines posted by some equipment companies and retrenchment in same store sales by golf retailers, the rounds played report is holding up better than many would have suspected. With the majority of the country now into summer, fingers crossed golfers continue their annual migration habits. It would appear once a golfer, always a golfer and the economy hasn’t interfered with that, at least not yet. For now, it appears money being spent by consumers on golf is being prioritized towards playing versus in general, upgrading equipment.
DON’T DO THE CRIME IF YOU CAN’T DO THE TIME: Crime never pays even though there are those who seem intent on trying to disprove this theory. EBay seller, Warren Fondrie, formerly of Vass, NC, should be the latest convert to appreciate the long arm of the law. He plead guilty in Moore County (N.C.) Superior Court on April 14, to 12 counts of selling counterfeit golf equipment. North Carolina Secretary of State Trademark Enforcement Division following an investigation that state officials said uncovered a major product counterfeiting operation headquartered in Moore County charged Fondrie with criminal use of counterfeit trademarks.
Fondrie was one of three defendants charged in December 2007 after the Acushnet Company (Titleist, FootJoy and Cobra Golf) initiated an investigation with the North Carolina Secretary of State’s Office. The cases against, Donald Fondrie, are still pending. The third defendant, Pei-i Chou, a Taiwanese, is presently in the custody of immigration authorities and is expected to be deported back to Taiwan.
In the case of the guilty plea, Acushnet said it observed counterfeit golf products being sold on eBay, which prompted it to conduct an internal investigation prior to presenting the matter to the N.C. Secretary of State’s Office. A two-month investigation resulted in allegations that the Fondrie's operated an Internet-based site that sold fake brand-name golfing gear imported from Asia. The product was then sold both domestically and internationally on a “store site” on eBay. Postal authorities monitored shipping traffic connected to the case, while law enforcement used eBay records to track sales. Thousands of fake golf products were seized, including counterfeit Titleist, Cobra and Scotty Cameron products, among other brands.
“We are pleased with the outcome of this case. Warren Fondrie sold counterfeit golf product to unsuspecting consumers on eBay. He has now been ordered to pay a substantial amount in restitution, and could face jail time if that restitution is not paid,” said Lisa Rogan, Acushnet Company trademark manager. “Acushnet is pleased with the outcome of this case, and it should send a strong message to those who participate in this type of illegal activity, that we will take the appropriate action to shut down these types of operations.”
Warren Fondrie was sentenced to 60 to 80 months in prison. However, he will not have to serve the time, if he complies with all the terms of his probation, which includes paying restitution of more than $253,338 to the victims. If he fails to comply, his probation will be revoked and he could go to prison as a result.
BACK TO SCHOOL: Some things never seem to change. Others argue that change is a constant and inevitable. Both statements appear to contradict each other on the surface but they have applications where they prove accurate. For example, at the 2009 NCAA Division I Men’s and Women’s Golf Championships, the overwhelming majority of players relied on a golf ball from Titleist. While its impossible to predict who will rise to the top the field in either the Men’s and Women’s division year over year, it does appear to be a matter of choice between Pro V1 and Pro V1x.
At the NCAA Division I Men’s Golf Championship played at the Inverness Club in Toledo, Ohio, 124 players in the field of 156 relied upon Titleist golf balls, more than seven times the nearest competitor with 16. The individual Men’s champion relied upon Titleist’s Pro V1x golf ball.
It was more of the same at the NCAA Division I Women’s Golf Championship at Caves Valley CC in Owings Mills, Maryland. 118 of the 126 players relied upon Titleist golf balls in what can be considered the most important on-course test of the year for collegiate golfer. That represented over 93% of the field and more than 29 times the nearest competitor with 4 balls in play. The individual Women’s champion also relied upon the Titleist Pro V1x golf ball for her success, as did all five members of the championship team. If you think that is a coincidence consider all five members of the Men’s championship team also trusted Titleist golf balls too.
Titleist was also the preferred brand in the club category including drivers (60 vs. 28), iron sets (65 vs. 26), fairway metals (103 vs. 39), utility metals (39 vs. 17), sand, lob and approach wedges (186 vs. 45) and putters (72 vs. 27).
The only area it didn’t dominate was on the ground, as Nike Golf said it led the field in shoe count with 66 players out of 156 in the field wearing it’s product. The next closest competitor was 53 followed by 37.
WE CAN HELP: Triumph Golf LLC announced its formation by three former ClubCorp senior executives to put an end to some of the current problems being felt by private golf and city clubs. Among those it listed are membership declines and operating challenges initiated by the current recession.
The three individuals spearheading the company are Jim McTeigue, Billy Sitton, and Michele Carroll who oversaw during their tenure ClubCorp's development, operations, and marketing of its more than 100 private, daily fee golf, and international golf club.
As Senior Vice President of Club Corp's Golf and Country Club Division, McTeigue was responsible for all aspects of operations at 90 properties with 170 golf courses and annual revenues in excess of $500 million. "Despite the severe disruptions in the private club industry today, I am confident we have the tools and skills to rescue troubled clubs and keep them viable,” he said. "In fact, we challenge club leaders to present a problem we have not yet overcome at one of the scores of clubs we have led to outstanding performance over the past twenty years."
As Vice President of Operations for Club Corp USA and Managing Director of Club Corp International, Billy Sitton provided development, marketing, and operations oversight of facilities in Mexico, Latin America and the Caribbean, Australia, and the United States. "Whether facilities have been operational for years or are just coming out of the ground, these are the most challenging times in memory. Certain areas of Latin America have been hit even harder than the US club market," Sitton stated. "We are providing a range of solutions, from golf operations and membership sales consulting to complete golf course management and ‘Four Tier Development Services’ for developers, owners, and operators throughout the Americas."
As Senior Vice President of Membership Marketing and Sales at ClubCorp, Michele Carroll oversaw the marketing and sales management of over 130 private golf and city clubs. "Beyond question, the number one issue facing today’s private clubs is member recruitment and retention," she said. "Proper positioning and programming can make clubs the very last amenity members will dream of giving up. For the price of one week’s vacation, members can enjoy a year of stimulating programs and activities for their whole family at their local clubs."
Rounding out Triumph Golf’s management team is Michael McTeigue, a former PGA golf professional at Bel Air and Riviera Country Clubs, who later earned an MBA from Stanford University and became a Silicon Valley entrepreneur and investment banker. Michael is in charge of business development and finance for the company. He noted, "Every market disruption provides outstanding upside for innovative operators and their investors. We actively are seeking opportunities to invest in or acquire clubs that can benefit from Triumph’s management expertise."
Triumph Golf said it is assembling a team of seasoned affiliates with expertise in agronomy, course design and maintenance, food and beverage, finance, legal, and golf operations through its extensive network in the industry. "We will put multiple SWAT teams in operation to respond immediately to clubs in trouble," said McTeigue. "The sooner we get involved, the better life will be for the private club owners and their members." Triumph Golf LLC is a full-service consulting, management, and investment company in the private club industry. Its team is comprised of 'hands on' leaders who have developed innovative, club-specific solutions for over 100 golf courses, country clubs, and resorts in the United States and Latin America.
TWO ARE HOPING TO BE BETTER THAN JUST ONE: KZG and Natural Golf have created a club marketing partnership. According to the companies, the move will expand the offering of equipment available to the followers of the single plane swing method made famous by the late Moe Norman.
Natural Golf CEO Peter Lineal stated, “Natural Golf’s Single Plane Swing is an easier-to-learn and easier-to-repeat swing with an avid following of golfers. In KZG we have found a manufacturing partner with a reputation and passion for quality products that will allow us to provide our golfers with the best clubs made anywhere to go with the best swing in golf.”
Jennifer King, President of KZG added, “We are delighted to partner with Natural Golf and their network of teachers and fitters. Most club manufacturers offer only a few club models…ostensibly to fit any golfer. With our Custom ProLine clubs, we are able to more than double the offering of clubs currently available that fit the single plane swing. Natural Golf can now offer many more club choices to better fit their golfer’s preferences, their handicap, their body type and their budget – from forged blades to game-improving cast irons.”
NO TRAIN WRECK HERE! If the economy is teaching us anything these days, one theme is certainly centered on efficiency. When times were better, waste wasn’t something many of us thought too much about. Today those thoughts may have been replaced somewhat by pain but also how we can be smarter moving forward especially with how we spend our money. Better days are ahead, after all U.S. Federal Reserve Chairman Ben Bernanke stated today the pace of economic contraction appears to be slowing, setting the stage for a return to growth later this year. While we all wait and watch for that to happen, every walk of life is centered on finding ways of improvement. One golf company thinks it has found a way.
Club Glove has introduced Train Reaction, a uniquely connected, three-piece luggage system that it says drastically reduces the amount of effort needed to pull or push gear by creating a perfect center of gravity which makes bags feel weightless.
Club Glove says Train Reaction eliminates 100 percent of downward and upward force on luggage handles, even when bags are not perfectly packed. "We call it 'outsmarting the Smarte Carte,' because even petite people can move heavy gear such as golf clubs in any direction with hardly any effort," said company President Jeff Herold. "Best of all, there's absolutely no assembly or external hardware needed to connect everything, so you can grab and go on the fly. Add in the fact that each bag can function as a separate piece of luggage and you've truly got the ideal system."
Made in the USA, the system retails from $667-$757 at the Club Glove website. It is available in six different, three-piece luggage set combinations -- four of which incorporate the company's Last Bag and Burst Proof golf travel bags -- with 17 different color options and unlimited embroidery possibilities.
"The Train Reaction system is the latest in a long line of Club Glove products to be conceived and designed with the golfer in mind," added Herold. "By never sacrificing quality, style or function, we are able to provide innovative solutions to players who travel with their clubs."
STOCK WATCH: It was another week and unprecedented, which if nothing else is becoming the norm. The week began on a fast and furious note as General Motors, after months of warnings and preparations, filed for bankruptcy at 8 am last Monday. Anyone needing a wake up call got it as the company that was for decades the world's biggest automotive concern and possibly the most important company in U.S. economic history, more of less had its hand forced into bankruptcy proceedings.
Following the lead of the unexplained, there was the disappearance of Air France Flight 447 that sounds more like a movie script than reality. Meanwhile, President Barack Obama's spoke in Cairo last week and challenged the Muslim world and Israel to step away from stubbornly held positions and attempt a lasting settlement. Across the pond from the US, Brits are beginning to call for the head of PM, Gordon Brown. Fueled by an expense scandal, Brown reshuffled some his cabinet, but defiantly insisted he was both the man for the job and wouldn’t be bullied into abandoning his responsibilities due to the difficult political climate. Yes, it was just another week and stock prices intent on one direction and one direction only.
Stocks locked in another week's rally, with the Dow up 3.1%, the Nasdaq rose 4.2% and the S&P 500 was higher by 2.3%. Since March 9, 2009 through last Friday, the Dow industrials have soared 28.3%. The 13-week stretch ranks second only to the Dow's 94% run-up in the two months following its early July 1932 bottoming, when the US economy was working its way out of a Depression.
TRY TO BEAT THIS: For anyone looking to stay closer to home this summer but wants a change of scenery; consider the Brunswick Isles Golf Trail, located along the northern coast of South Carolina and the southern coast of North Carolina. Now through September 9, 2009 golfers can choose from The Majestic Trails or The Magnificent Trails packages. Both offers include golf, carts, and a two-bedroom/two bathroom villa for just $99 a day, per person, based on quad occupancy. The toughest decision to make might be which courses you want to play.
With The Majestic Trails golf package, golfers can choose to play from Sandpiper Bay, Lions Paw, Panthers Run, Meadowlands, Lockwood Folly, Sea Trail Maples, Sea Trail Byrd and Brunswick Plantation golf courses.
The Magnificent Golf Trail package offers play at Rivers Edge, Thistle, Farmstead, Glen Dornoch, Tidewater, River Hills, Heather Glen, Bald Head Island, Sea Trail Jones, Tigers Eye, Leopards Chase and The Pearl golf courses. Official Trail accommodations are available at Brunswick Plantation, Village at the Glens and Coastal Golfaway.
“These courses offer golfer variety within the Brunswick Isles Golf Trail,” said Jack Himmelsbach of The Glens Golf Group, which manages Trail, courses Heather Glen and Glen Dornoch, as well as accommodations partner Village at the Glens. “The courses offer everything from links-style golf to rolling fairways that line salt marsh and rivers. And, there are also outstanding accommodations that put you right in the heart of the Trail. We've even made it easy to book these packages online through our Web site.”
BRING THE FAMILY: Waikoloa Beach Resort, located on the Big Island of Hawaii believes it has one of the best values on resort golf in Hawaii. The new "Waikoloa Family Golf Days," is running through July 31, 2009, after 3:00 p.m. every day of the week, where families can play nine holes on the Kings' Course. It carries a summer value price of $50 per adult and $25 per junior golfer age 17 and under. The cost includes green fees, cart fee, and complimentary rental clubs for juniors. Adult clubs are available at a $25 rental fee, and junior clubs are provided on a first-come first-served basis.
"Waikoloa Family Golf Days is a perfect opportunity for our many hotel, condominium and resident guests to bring their families out to enjoy this recreational activity in a pristine island setting," explained Scott Head, vice president of operations for the Waikoloa Land Company.
Waikoloa Kings' Course, created by British Open champion Tom Weiskopf with design partner Jay Morrish is, a Scottish-style layout situated in paradise. The 7,064-yard, par-72 track weaves in and out of ancient lava fields and features 83 strategically placed sand traps and pot bunkers along with other authentic links golf trappings such as double greens and undulating fairways.
Anyone headed over to the Big Island this summer or thinking of planning a vacation to Waikoloa Beach Resort can visit www.waikoloagolf.com or phone (877) WAIKOLOA for more information.
Last Updated (Wednesday, 27 January 2010 16:24)