GOLF GALAXY TO ACQUIRE THE GOLFWORKS
Company to Host Conference Call Feb.
16 to Discuss Acquisition
EDEN PRAIRIE,
Minn. (Feb. 15, 2006) Golf Galaxy, Inc. (Nasdaq: GGXY), the
interactive golf superstore offering Everything for the Game®,
announced today that it has signed an agreement to purchase The
GolfWorks®, one of the golf industrys most complete sources for golf
club components, clubmaking tools and supplies, and technical
information. The acquisition is expected to close in early
March.
The purchase
price, subject to customary closing adjustments, consists of a
combination of approximately $4 million in cash; Golf Galaxy common
stock valued at approximately $4.5 million; and warrants to purchase
150,000 shares of Golf Galaxy common stock, valued at approximately
$1.5 million. In addition, Golf Galaxy will assume approximately $5
million in debt from The GolfWorks. The GolfWorks had fiscal 2005 net
sales of approximately $24.5 million. Golf Galaxy said it expects the
transaction to be neutral to earnings per share in fiscal 2007 and
accretive to earnings per share beginning in fiscal
2008.
The acquisition
of The GolfWorks will enhance the performance and productivity of our
stores by adding new products and a new customer base, reinforcing our
Everything for the Game strategy. In addition, The GolfWorks
capabilities will help us grow our direct business, said Randy
Zanatta, president and chief executive officer of Golf Galaxy. We
believe this is a great opportunity to build on the success that The
GolfWorks has achieved and grow both of our brands.
The GolfWorks
operates a direct-to-consumer business through its catalogs and its
ecommerce site, selling both proprietary components and brand name
shafts and grips. Founded by Ralph Maltby in 1976, The GolfWorks,
based in Newark, Ohio, has been manufacturing and distributing golf
clubs, machines, gauges, tools and supplies worldwide to golf club
repair shops, golf professionals, manufacturers, custom clubmakers and
hobbyists for 30 years.
Maltby is
recognized throughout the golf industry as a technical expert. His
books have been the standard teaching manuals for the Professional
Golfers Association of America for the past 28 years. In 2002 Maltby
developed the proprietary Maltby Playability FactorTM, a clubhead
rating process that objectively identifies specific clubhead
performance characteristics and separates all models into five
distinct playability levels. Maltby also has produced a comprehensive
video series on various aspects of clubmaking, design, repair and
fitting.
In addition to its
domestic operations, which include an assembly and distribution
center, and customer contact center, The GolfWorks has an operating
division in Ontario, Canada. The GolfWorks has approximately 100 full-
and part-time employees, all of whom will be retained with the
acquisition. Following the close of the acquisition, Ralph Maltby,
founder and chairman of the board of The GolfWorks, and Mark
McCormick, its chief executive officer, will join Golf Galaxys
management team. The GolfWorks will operate as a wholly owned
subsidiary of Golf Galaxy.
This is an
exciting new chapter for The GolfWorks, said Maltby. We look forward
to sharing our technical expertise with the Golf Galaxy team,
extending The GolfWorks brand to brick and mortar retail stores, and
working together to develop additional product and service offerings
for golfers of all skill levels.
Although several
Golf Galaxy stores and GolfGalaxy.com currently offer The GolfWorks
assortment of tools, components, shafts and grips, following the
acquisition, Golf Galaxy plans to offer a greater selection of these
items both online and in its stores. Golf Galaxy plans to feature The
GolfWorks store in a store concept in 29 of its stores by mid-May
and in all of its stores by this fall.
Conference Call
and Webcast
Golf Galaxy will conduct a conference call at 9 a.m. CST , Feb.
16, 2006. Interested parties may listen to the call by dialing
800-299-7089 or international 617-801-9714 (passcode: 72651366). A
live webcast will also be available on www.GolfGalaxy.com. Interested
parties should dial into the conference call or access the webcast
approximately 10-15 minutes before the scheduled start time. A replay
will be available approximately one hour after the conference call
concludes and will remain available through Feb. 23. The replay number
is 888-286-8010 or international 617-801-6888 (passcode: 31655769).
The webcast will be archived on www.GolfGalaxy.com for
approximately one year.
About The
GolfWorks
The GolfWorks is the golf industrys most complete source for
golf club components, clubmaking tools and supplies, and technical
information. Located in Newark, Ohio, The
GolfWork
