Welcome to the Golfsmith International Holdings LLC fourth quarter 2008 earnings conference call. Today’s call is being recorded. For opening remarks and introductions, I would like to turn the call over to Mr. Joe Teklits of Integrated Corporate Relations.

Thank you for joining us today to discuss Golfsmith’s fourth quarter fiscal 2008 results. Before we begin the call, I would like to review our Safe Harbor statement. Our presentation includes and our response to various questions may include forward-looking statements about the company's financial results and about future plans and objectives. Any such statements are subject to risks and uncertainties and could cause the actual results and implementation of the company's plans and operations to vary materially. These risks are discussed in the company's annual report on Form 10-K for fiscal 2008 filed with the Securities and Exchange Commission. We issued our press release at the close of the market today. If you did not receive a copy, you can find one on our website or by calling our Investor Relations at 203-682-8200. On our call today we have with us Golfsmith's Chairman and CEI Martin Hanaka, and Chief Operating Officer Sue Gove. And with that, I’ll turn it over to Marty.

Also joining Sue and I in Austin is Ginger Bunte, she is our departing CFO and today is officially her last day and we want to thank her for all of her diligence and hard work and contribution over the years. Thank you, Ginger. As you may know, Sue is going to replace her as Interim CFO and additionally we have with us Scott Wood our General Counsel, and also Janette Ramirez our Controller. After my opening remarks, Sue will give you a detailed financial review and discuss some significant operating improvements in our company. And of course all of us will be available for questions at the conclusion. While I think our team did a great job reacting as quickly as possible to the new consumer trends that took place the second half of the year, the challenging economic environment continued to create significant pressure throughout 2008, and of course accelerated in the fourth quarter. We expect in our planning for continued pressure at least through the first half of 2009. Our focus in the coming year, like that of several other specialty retailers, will be on maintaining our strong cash position by planning continued reduced capital expenditures, carefully managing expenses and controlling inventory levels until we see signs of recovery in consumer spending GDP and overall consumer spending. As we stated in the recent past, we have several initiatives in place to improve operating efficiencies and increase store productivity and Sue, again, will provide you an update on our progress later in the call. We will also continue to do what we can to drive sales to an improved in-store experience, optimize merchandising assortments and a targeted advertising program. To briefly review our financial results, revenues declined 14.1% to $67.8 million in the fourth quarter of 2008 as…

I will first review the financials and then provide an update on some of the key initiatives we have in place that should benefit us in 2009. As Marty mentioned, for the fourth quarter of fiscal 2008, we reported net revenues of $68 million compared with $79 million for the fourth quarter of fiscal 2007. Net revenues reflect a 17.3% decrease in comparable store sales and a 23.1% decrease in net revenues from our direct channel. Comparable store sales continue to be challenging in the current economic environment. We experienced a decrease of 19% in November and December after a decrease of 12.7% in October. Gross margins for the fourth quarter was 30.7% compared to 34.9% for the same period last year. During the fourth quarter, we recorded a $2.2 million reclassification adjustment as a result of an analysis of advertising costs related to co-op ad spending. This resulted in a 320 basis point year-over-year increase in cost of goods sold and an equivalent reduction in SG&A. The balance of the gross margin decline was primarily the result of an unfavorable mix shift, along with some incremental promotional activity. Operating expense dollars decreased 9% to $27.5 million from $30.2 million in the same period last year, excluding the $43 million non-cash impairment charge related to goodwill recorded in the fourth quarter of 2007. The decrease in operating expenses resulted from lower marketing spend in the direct to consumer channel, lower wages and related benefits at retail, and reduced store opening cost. These improvements were in addition to the reclassification adjustment previously mentioned. Also in the fourth quarter of fiscal 2008 in connection with our review of long-lived assets for impairment, we recorded a charge of approximately $300,000 related to the impairment of leasehold improvement at one store. We do not,…

(Operator Instructions) Your first question comes from Hayley Wolff – Rochdale Securities

I've a couple of questions for you. First, in terms of the first half versus second half outlook, it's always said that Father's Day is the golf industries Christmas, so I'm trying to understand what's the potential that the golf season is just a bust given how it overlays with the economy. The second question is can you give a little more detail on traffic versus average ticket, and then give us some color of what you've seen January and February?

When we started the plan off, we didn't think there'd be much improvement in the first quarter from Q4 in terms of sales. We thought there would be some improvement as we cycle through this. I guess we're 16 months into this thing depending how you count, and we just felt there'd be some improvement in Q2. Boy, I really wish I knew what the consumer was going to do, but to answer your last question, at the same time I would tell you we've seen some mitigation of the losses, so our decreases are diminishing. So, is it a trend? We're not too sure. January and February are low-volume months, March will be more telling and it builds from there. But if the current trend continues, we're comfortable we'll make our numbers and beat them, and we're running slightly ahead of our profit plans for the first couple of months of the year. In terms of traffic and AOV, they were both down about the same amount. We had less people coming in the store and they're buying less. In fact, our average order dropped below $100, which is unusual for us. Again, that showed that people were moving to value and they stopped buying the big tickets. Our compass category has been Pro-line clubs. So, that's it in a nutshell.

What about in the Southern markets?

If you looked at the markets they fall into three groups, those groups that were down by zero to ten and those markets that were down in the mid-teens, the low teens and then a couple of markets that were up more than the average, just two of those. So, there's one at each, so if you looked across the board, you wouldn't say there was a pattern. It's not about weather. Somewhat about competition, but this was across the board.

Just two more questions. First, can you just give a little more detail on SKU count, what categories you're looking to clean up? And then second, just walking into your stores, it looks like there's a little more of a private label initiative on accessories.

We actually have gone through every single assortment and we do it in-store and we’ve done product line reviews and we take every assortment and we break it down into four quadrants, A is everywhere then B, C, D and then there’s some seasonality and some geographic that influences what SKUs everybody gets. We basically look at the productivity on moving 26-week basis and we’ve got a lot of SKUs out that just don’t produce. And so that’s something we’ve done across the board. And it’s not any single category. Every category kind of gets the same treatment. But what we’ve done recently on top of that is we’ve looked at the productivity of the whole box in terms of square footage and tried to come up with what we’ll call a DDP, a direct departmental profitability, that takes into account, not only sales per square foot, but your gym ROI a rent factor, a payroll factor, an inventory carrying cost factor. We’ve kind of looked at which businesses really work for us and it kind of leaves us to the answer there are a couple of businesses that we could do with less resources and without tipping our hand strategically, we’re making those changes but we can’t tell you which categories. Just be confident we are going to get the box to be an optimal box in terms of productivity. In terms of private label, we made that change a year ago and we’re all private label. If you go through some of the consumable accessories tees and ball markers and brushes and on and on you’re going to find it all under our own private label. It was a terrific move. David Lowe runs that for us. He’s done a terrific job with his team and we’re real proud of it and we’re trying to keep it in balance. It’s a category where brands really don’t matter that much. So in those areas where it’s kind of invisible we’ve introduced private label.

Your next question comes from Todd Slater – Lazard Capital Markets.

Could you just talk a little bit about any structural changes that you see taking shape in the market in terms of consolidation be it the institutional guys or independents or you hear anything on the PGA side and what would happen if there were some stores closed in some of your markets? What kind of a benefit do you think that might be? And then secondly, I guess with the stock at these levels, would you guys expect to see or consider management buying shares at these prices?

I would say in terms of the second question, there have been a number of management members and board members who were buying stock up until our window closed in mid-December. This is our practice. It will probably be open for a couple weeks this quarter and then will close again because we’re so close to the end of Q1. But I think you’ll see that management has been pretty active in buying shares at good pricing. In terms of the first question, we think that there could be a real benefit in terms of the industry structure due to this recession. We don’t really like to talk about competition, but it is a fact that PGA closed its big store in Buck Head and one of their stores is being cut in half. We understand there are a couple others that they’d like to exit. So perhaps that will happen, and if it does, that really puts us in a good position.

What’s the store that’s cut in half?

The Kennesaw and Gold’s Gym is taking half their box. We know that our big competitor on the west coast, which is known as World Wide Golf and operates under three different brands, has just closed a couple of stores and one in the desert and that’s a good fact. We know a store in Carolina, which was a major independent, has closed its doors in the fall, Carolina Custom Golf. We know a competitor up in the Virginia area and Maryland area closed, Mammoth Golf. So if you looked at it, I think there’s been net about 76 closings up through October/November and we think there will be more to follow. So if there’s good news the people that get through to the other side and are healthy, I think, can take advantage of a structural change in this industry and we believe that we’ll be one of those companies.

One more quick question, if you could just quantify for us the extra week.

What the extra week was in terms of volume was roughly 4 million.

And what do you think net to the bottom line?

I don’t think that we’ve actually quantified it, but again I don’t think that it is material. Because, again, it’s during the January period, which is where our operating costs are at more of an average level and that volume is at a low level of volume. So just off of the top of my head I would say that it was probably not a profit week.

Just a footnote on that, it was just about four and the margins were the lowest week margins of the period. We go into our sale and clearance mode and our margins were like 300 basis points below prior year that week as we liquidated inventory, particularly in apparel. And when the business really got soft in October, our weeks of supply and apparel really built and we took aggressive action to try to get as much as we could for it as soon as we could and we paid a price for it in December and that last week was clearly our lowest margin week of the period.

There are no more questions in the queue at this time. Mr. Hanaka, I would like to turn the call back over to you for any additional or closing remarks.

As we said in the last call, we were going to play defense and that involved expense controls and inventory management and capital expenditure control and proving our guest first, and while redundant it is still true. We are still on defense. Cash preservation is the mantra around here and, as we invest in better marketing spend we think that we can gain market share in this very difficult environment. We appreciate your time and attention, thank you very much.

That does conclude today’s conference. We appreciate your participation and you may disconnect at this time.