Adams Golf, Inc. NASDAQ: ADGF (5.42) Long Pitch Prepared by: Eric Thomas 7 November 2011

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Presentation Outline

•  Business Overview

•  Thesis Points

•  VAR

•  Misperceptions

•  Risks

•  Questions?

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Business Overview •  Competes in the Golf Equipment and Supplies

Manufacturing Industry. •  Engages in the design, assembly, marketing and

distribution of golf clubs and accessories. •  Acquired Yes! Golf in January 2011. •  Putter Manufacturer fills a void in Adams’ product line.

•  Founded in 1991 and based in Plano, TX. •  Has 129 full-time employees.

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Adams Golf, Inc. Products

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Products Overview •  Products include lines of woods, irons, fairway woods,

and wedges. •  Will begin offering putters with the re-launch of the

recently acquired Yes! brand of putters. •  Offers a line of golf bags, hats, and other accessories. •  Sells its products through golf shops, sporting goods

retailers, and mass merchants. •  Distributes its products internationally in Europe,

Canada, South Africa, Japan, and other Asian countries.

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Yes! Brand of Putters

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Thesis Points 1.  Adams Golf, Inc. provides a full line of high-performance

golf clubs that beats out the competition.

2.  Adams Golf, Inc. is a relative value compared to its competitors.

3.  Adams Golf, Inc. has a low debt level that makes it a relatively low risk moving forward and provides a means for further investment by the company.

4.  The company has had recent success in expanding its market share against its larger competitors such as Nike, Fortune Brands, Mizuno, and Callaway.

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Innovative Product Line •  The Speedline driver is one of Adams’ highlight products. •  Claims to be the longest driver on the market. •  Velocity Slot Technology reduces drag by 35%. •  Increases clubhead speed and forgiveness.

•  Adams was the number 1 hybrid on the PGA, Nationwide and Champions tours during 2010.

•  Since the inception of the Golf Digest Hot List rankings, Adams Golf has earned more category leader awards for innovation than any other manufacturer.

•  Consistent with the above results, recent brand research shows that Adams’ brand strength is continuing to improve, as is purchase interest in its products.

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Adams Golf, Inc. Is an Innovative Equipment Designer and Manufacturer

Velocity Slot Technology Standard Technology

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The Longest Hitter in the World Uses Adams

•  Jamie Sadlowski – two time RE/MAX Long Drive Champion (2008, 2009) •  http://www.youtube.com/

watch?v=aoIzjCqU2-U

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Adams Golf Relative Value •  The company’s relative value is exhibited by a variety of

competitive measures against industry averages. •  Has a P/E ratio of 9.02 compared to industry average of

17.49. •  Has an operating earnings yield of 12.1%. •  TTM EPS was 132.89% compared to an industry average

of 90.57%. •  Price to Sales of 0.49x versus 1.50x for the industry. •  Price to Book of 0.90x versus 5.13x for the industry.

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Adams Golf Low Debt Levels •  Adams Golf, Inc. is a low risk moving forward. •  A Debt/Equity ratio of 0. •  Current Ratio of 3.33. •  Quick Ratio of 1.52.

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TTM Stock Performance

Price: $5.50 52 Week Range: $3.25 - $6.25 Mkt Cap: 42 Million Beta: 0.9 P/E: 9.2 Total Cash: $6.72 Million EPS: $0.60 Total Debt: $0

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Expanding Market Share

•  Adams’ Irons market share increased by 17% to currently control 10.2% of the U.S. market.

•  Adams’ Woods market

share increased by 5.5% to currently control 6% of the U.S. market.

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Value Added Research

•  Personal use of products has made me a strong believer in Adams Golf’s ability to outperform competitors.

•  There are no analysts covering this company.

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Misperceptions •  Adams Golf, Inc. is an overlooked small cap company.

•  The lack of analyst coverage causes the stock to be inefficiently priced.

•  Investors may perceive the drop in cash flow as part of operations. The majority of the drop was due to a one-time $5 million payment to settle a lawsuit.

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Potential Catalysts

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Potential Catalysts

•  ADGF should realize significant stock appreciation through increasing sales growth, which has been strong.

•  Adams will be poised to experience significant growth as the economy emerges out of the recession.

•  International markets present large opportunities for growth, especially in Europe and Asia.

•  The stock will benefit when it becomes covered by an analyst.

•  Until then, MII will have a distinct advantage in estimating a reasonable value for ADGF.

•  ADGF could potentially be a takeover candidate as it continues to steal market share from its larger competitors.

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Risks of Adams Golf •  Sustainability of recent growth in earnings and revenue. •  Changes in its relative value to the industry. •  Highly subject to seasonality and economic conditions. •  Ease of patent infringement by competitors. •  Ability to continue to offer innovative products. •  Ability to time product releases to maximize profits. •  Failure of Yes! Acquisition. •  Increasing Supplier Power.

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Questions?

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