BusinessTN

Golf is a hard game for players and even harder for products manufacturers. It might seem intuitive that when the economy tanks, so do companies in the business of leisure sports like golf; however, Memphis-based True Temper is evidence to the contrary. In 2008, it was good to be in a business built on patrons with lots of disposable income.

"Rounds played were down, as were retail sales," explains True Temper CEO and President Scott Hennessy. "[But] the golf industry actually holds up reasonably well in a recession because the average customer is in a better economic situation than those usually on the first line hit."

True Temper's net sales in 2007 increased more than 7% from 2006 ($116.3 million from $108 million), but along with it came a net loss more than triple the previous year ($33.5 million from $10.8 million). Hennessy told analysts the golf-shaft company was hit by unprecedented high costs for nickel, manufacturing inefficiencies at its primary facility in Mississippi and rising health care costs.

The Black & Decker spin-off seemed to right itself in midst of the recession, however, reporting its largest revenue quarter in company history in the first quarter of 2008. In June, company executives announced that net sales had continued to increase over the first half of the year more than 17% over 2007 ($73.6 million from $62.6 million) and narrowing net loss to $1.7 million, which is way down from 2007's loss of $5.4 million in the first six months.

"Our company is anticipating record sales [again] this year," Hennessy says.

How? Well, there's the usual--controlling expenses, watching investments, etc.--but True Temper is also thinking outside the greens.

"We are aggressively introducing new products and expanding into new categories," he says.

The industry-leading manufacturer of golf club shafts pushed out into producing performance sports products for cycling, hockey, softball/baseball and lacrosse a few years ago. The gambit is paying off, with those divisions contributing more than 15% to the company's sales figures and enabling its continued growth.

The private company has less than 1,000 employees in almost a dozen facilities around the world.

Hennessy notes Memphis plays a big part in the company's ability to sustain momentum, noting obvious attributes such as location, supply-chain infrastructure and FedEx. But Hennessy also says the area's inexpensive utility rate gives his company a cost advantage at its primary facility in North Mississippi.

True Temper's handle on the market may stem from its shafts, but Hennessy would be the first to admit that it helps to have cheap energy ... and moneyed customers.