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Golfsmith Announces Fourth Quarter Fiscal 2010 Results

We look forward to building upon this success with the new initiatives we outlined for fiscal 2011 which include: aggressively building our successful web business; expanding a proven, powerful new store model, driving optimal 4-wall results by store segment; shifting merchandise assortments to more apparel and footwear; expanding proprietary brands; and delivering operational excellence. We believe that we are ideally positioned to benefit from the consolidation of the golf industry as well as the economic recovery in 2011 and beyond.”

Conference Call Information

The company will host a conference call today at 9:00 a.m. (eastern time) to discuss its fourth quarter and fiscal 2010 financial results. The call will be simulcast over the Internet at A replay will be available for 30 days after the call at the aforementioned website. Telephone replays can be accessed for one month following the call by dialing 877-870-5176 (U.S.) or 858-384-5517 (international) and entering passcode 1538031.

About Golfsmith

Golfsmith International Holdings, Inc. (NASDAQ: GOLF), has been in business for over 40 years and is a specialty retailer of golf and tennis equipment, apparel and accessories. The company operates as an integrated multi-channel retailer, offering its customers the convenience of shopping in more than 70 stores across the United States, through its Internet site and from its assortment of catalogs. Golfsmith offers an extensive product selection that features premier branded merchandise, as well as its proprietary products, clubmaking components and pre-owned clubs.

Cautionary Language

This press release contains forward-looking statements within the meaning of the federal securities laws. Statements that are not historical facts, including statements about the company’s beliefs and expectations, are forward-looking statements. Forward-looking statements include statements preceded by, followed by or that include the words “may,” “could,” “would,” “should,” “believe,” “expect,” “anticipate,” “plan,” “estimate,” “target,” “project,” “intend,” or similar expressions. Forward-looking statements are not guarantees of performance. These statements are based on management’s beliefs and assumptions, which in turn are based in part on currently available information and in part on management’s estimates and projections of future events and conditions. Important assumptions relating to the forward-looking statements include, among others, assumptions regarding demand for the products, the introduction of new product offerings, store opening costs, the ability to lease new sites on a timely basis, expected pricing levels, the timing and cost of planned capital expenditures, competitive conditions and general economic conditions. These assumptions could prove inaccurate. Forward-looking statements also involve risks and uncertainties, which could cause actual results that differ materially from those contained in any forward-looking statement. Many of these factors are beyond the company’s ability to control or predict. The company believes its forward-looking statements are reasonable; however, undue reliance should not be placed on any forward-looking statements, which are based on current expectations. Further, forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update publicly any of them in light of new information or future events.
Golfsmith International Holdings, Inc. Consolidated Statements of Operations
Three Months Ended Fiscal Year Ended
January 1, 2011 January 2, 2010 January 1, 2011 January 2, 2010
Net revenues $ 72,884,488 $ 63,849,644 $ 351,851,394 $ 338,025,688
Cost of products sold   49,520,381     42,184,747     232,311,169     222,536,657  
Gross profit 23,364,107 21,664,897 119,540,225 115,489,031
Selling, general and administrative 27,214,422 27,975,616 120,377,666 117,272,149
Store pre-opening expenses 240,688 82,508 737,898 292,803
Store closing, lease termination and impairment charges   1,133,212     -     2,705,836     44,716  
Total operating expenses 28,588,322 28,058,124 123,821,400 117,609,668
Operating loss (5,224,215 ) (6,393,227 ) (4,281,175 ) (2,120,637 )
Interest expense 455,942 244,422 1,262,053 1,304,625
Other income (expense), net   2,925     13,306     67,781     63,497  
Loss before income taxes (5,677,232 ) (6,624,343 ) (5,475,447 ) (3,361,765 )
Income tax benefit (expense)   (38,784 )   324,706     (17,898 )   (182,850 )
Net loss   (5,716,016 )   (6,299,637 )   (5,493,345 )   (3,544,615 )
Net loss per common share:
Basic $ (0.35 ) $ (0.39 ) $ (0.34 ) $ (0.22 )
Diluted $ (0.35 ) $ (0.39 ) $ (0.34 ) $ (0.22 )
Golfsmith International Holdings, Inc. Consolidated Balance Sheets

January 1, 2011
January 2, 2010
Current assets:
Cash $




Receivables, net of allowances 2,011,241 1,949,411
Inventories 79,417,087 77,991,098
Prepaid expenses and other current assets   6,891,261     4,737,077  
Total current assets 88,523,929 85,373,784
Property and equipment, net 58,925,620 56,475,787
Intangible assets, net 25,524,016 25,945,699
Other long-term assets   2,057,363     1,076,592  
Total assets $ 175,030,928   $ 168,871,862  
Current liabilities:
Accounts payable $ 35,694,830 $ 32,371,826
Accrued expenses and other current liabilities   20,393,614     19,491,865  
Total current liabilities 56,088,444 51,863,691
Deffered rent liabilities 15,344,004 13,412,548
Long-term debt   40,390,034     36,000,000  
Total liabilities 111,822,482 101,276,239
Total stockholders' equity 63,208,446 67,595,623
Total liabilities and stockholders' equity $ 175,030,928   $ 168,871,862  

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