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Today's news...8/22/05

AUGUST 22, 2005 -- Bushnell Gets $117 Million Investment

American Capital Strategies Ltd. has invested $117 million in the senior and junior subordinated debt of Bushnell Performance Optics, a designer and marketer of a diversified portfolio of branded, high- performance sport optics and premium eyewear products targeting outdoor and sport enthusiasts. American Capital's investment supports Bushnell's acquisition of Michaels of Oregon Co., a manufacturer and marketer of accessories for the hunting, shooting sports and law enforcement industries. The combined entity will now operate as Bushnell Outdoor Products. Antares Capital Corp. leads a syndicate providing a senior credit facility. Wind Point Partners is the majority owner of Bushnell.

"We are pleased to be investing with Wind Point Partners for the second time and supporting the acquisition of Michaels by Bushnell," said American Capital COO Ira Wagner. "Bushnell has a rich brand history and maintains the number one or number two brand within each of the sport optics, outdoor technology, and hunting and shooting accessory categories in which it competes."

Racquet Shipments Rose 12% Over TTM

Sales of tennis racquets to dealers in the trailing 12 months through June '05 are up 29% in units and 18% in dollar sales vs the 12-month period to June '03. This follows '04 results that had increases of 16% in units and 8% in dollars.

Tennis Industry Association president Jim Baugh saw positives in the results. "First, the unit sales growth the past two years shows some of our new player programs are starting to work. Second, the growth in dollar sales, especially this year, shows consumers are buying more premium, high performance racquets as well. In fact, the largest growth category this year is the super premium category (up over 35%) which indicates positive reaction to the recent introductions of new technology frames from many of the top manufacturers."

This increase also ties in with what dealers expect for sales increases in '05. 57% of dealers indicated that they expect sales to increase while only 10% predict a decrease in sales to consumers.

Ball sales, after growing in units in '04, are down slightly in '05. Baugh said this could be deceiving. "It is getting increasingly more difficult to track industry balls sales as some of the top retailers are beginning to import balls directly under their own brands. We are hoping to get these retailers to submit their sales to ball shipment census reports but this is a process.

"Overall, we are on the right track. Industry sales are the most positive they have been in years and the efforts to grow the game at the grassroots level have intensified also. Along with the USTA, we have promoted Tennis Welcome Centers for two straight years. The USTA has greatly expanded its 'Tennis in the Parks' campaign and at the '05 US Open, we will launch Cardio Tennis to consumers."

Under Armour Garb Featured In Two Video Games

Under Armour Performance Apparel announced its entry into the branded entertainment market with the release of two upcoming video games, Tom Clancy's Ghost Recon 2: Summit Strike and Tiger Woods PGA Tour '06. The company partnered with Ubisoft Entertainment and EA Sports, international developers and distributors of best-selling titles for interactive computer and gaming entertainment products, to outfit characters in the upcoming games with a variety of Under Armour apparel and accessories.

Under Armour's Tactical product line provides military and law enforcement with smoisture-wicking and temperature control technology. Since its release, Tom Clancy's Ghost Recon sold over 8.5 million units. In the second installment, Ghost Recon 2: Summit Strike, gamers will now be able to equip their characters with Under Armour's Artic Beanie, the Hood and the Tactical Mock Turtleneck.

Additionally, in Tiger Woods PGA Tour 2006, a game where you are able to create a golfer using the most advanced Game Face technology ever released, gamers will be able to customize their players to sport a variety of Under Armour golf apparel.

This will make the competitive outdoor business in Indiana even more competitive. Ground has been broken on a new $30 million retail center in Lafayette, IN. The Lafayette Pavilions will be anchored by Gordman's and Sportsman's Warehouse. The project is slated for completion by next summer. On the other hand, Cabela's will likely drop plans to build an outdoors superstore in Hammond, IN, if the Woodmar Country Club members vote to reject the giant retailer's $14 million offer to purchase the club. Woodmar members voted down the $11.5 million offer in April.

White House staffers visited the Gym Source in New York City. They purchased a Cybex Arc Trainer for Camp David.

ECCO will sponsor David Sullivan's quest to walk the length of the UK while hitting golf balls to benefit a children's charity. Sullivan is wearing ECCO golf shoes and displays the ECCO logo on his apparel throughout his seven-week quest to raise 250,000 pounds.

Umbro's shares fell 4.2% after Sportsworld International reduced its stake in the company to 3.94%. This followed media reports that it was mulling a 300 million-pound takeover.

MM Warburg upgraded Adidas-Salomon to hold from sell, as the shares have reached current target price at EUR 147, recovering from two-week dip after Reebok takeover news. The takeover remains a major challenge, however it's likely the transaction and attractive refinancing costs will have a positive effect on '07 EPS, said Warburg. The company was downgraded to neutral from buy at Merrill Lynch, citing near-term concerns. It said industry feedback since the Reebok deal, which Merrill continues to have a positive view of, has raised the prospect of "a more sinister slowdown in macro athletic footwear." It noted little exciting new product, commentary from Shoe Carnival, K-Swiss and Foot Locker pointing to slow BTS athletic sales, and Foot Locker's "very negative secular picture of Europe."…Wedbush Morgan downgraded Pacific Sunwear to hold from buy…Brean Murray downgraded K-Swiss from accumulate to hold.


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Quick links: One-click access to topics in this article.

Sporting goods industry
Mergers & acquisitions
Law enforcement

American Capital Strategies Ltd.
Wind Point Partners LP
Antares Capital Corp.
Ecco SA

law enforcement
Video Games
branded entertainment market
law enforcement industries
gaming entertainment products

Jim Baugh
Ira Wagner
Armour Garb
Tom Clancy
Tiger Woods PGA Tour

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