1202273--3/30/2007--GOLFSMITH_INTERNATIONAL_HOLDINGS

related topics

{customer, product, revenue}

{stock, price, operating}

{property, intellectual, protect}

{product, market, service}

{competitive, industry, competition}

{system, service, information}

{operation, natural, condition}

{personnel, key, retain}

{cost, regulation, environmental}

{loan, real, estate}

{condition, economic, financial}

{acquisition, growth, future}

Competition from new and existing competitors could have an adverse effect on our sales and profitability. Our growth will be adversely affected if we are unable to open new stores and operate them profitably. If our key suppliers limit the amount or variety of products they sell to us or if they fail to deliver products to us in a timely manner and upon customary pricing and payment terms, our sales and profitability may be reduced. Our sales could decline if we are unable to process increased traffic or prevent security breaches on our Internet site and our network infrastructure. We lease almost all of our store locations. If we are unable to maintain those leases or locate alternative sites for our stores on terms that are acceptable us, our net revenues and profitability could be adversely affected. Our operating costs and profitability could be adversely affected if we are unable to accurately predict and respond to seasonal fluctuations in our business. Many of our stores are clustered in particular metropolitan areas, and an economic downturn or other adverse events in these areas may significantly reduce the sales for stores located in such areas. Our comparable store sales may fluctuate, which could negatively impact our future operating performance. If we fail to accurately target the appropriate segment of the consumer catalog market or if we fail to achieve adequate response rates to our catalogs, our sales and profitability may be adversely affected. If we lose the services of our executive officers, we may not be able to manage our operations and implement our growth strategy effectively. Atlantic Equity Partners III, L.P. has significant influence over us, including the ability to nominate a majority of our board of directors, and its interests may conflict with the interests of our other stockholders. Our sales, profitability and company-wide operations would be adversely affected if the operations of our Austin, Texas call center or distribution and fulfillment center were interrupted or shut down. A disruption in the service or a significant increase in the cost of our primary delivery service for our direct-to-consumer operations would have a material adverse effect on our sales and profitability. An increase in the costs of mailing, paper, and printing our catalogs would adversely affect our profitability. If we are unable to enforce our intellectual property rights, our net revenues and profitability may decline. We may become subject to intellectual property suits that could cause us to incur substantial costs or pay substantial damages or prohibit us from selling our products.

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1202273--3/30/2007--GOLFSMITH_INTERNATIONAL_HOLDINGS_INC