UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 14, 1997
ROYAL GRIP, INC.
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(Exact name of registrant as specified in its charter)
Nevada 0-22230 86-0615648
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
444 West Geneva Drive Tempe, Arizona 85282
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (602) 829-9000
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Not Applicable
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
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On May 14, 1997, the Company announced that it has executed a definitive
agreement to combine with FM Precision Golf Corporation, a privately held golf
shaft manufacturer based in Torrington, Connecticut. The proposed transaction is
more fully described in the press release included herein as Exhibit 99.
Item 7. Exhibits
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Exhibit No. Description Page
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99 Press Release issued on May 14, 1997 Filed herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
ROYAL GRIP, INC.
Dated: May 23, 1997 By: /s/ Tom Schneider
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Tom Schneider
Its: Vice President - Finance
Exhibit 99
Royal Grip and FM Precision Golf announce the signing of the definitive
agreement to combine
Royal Grip announces first quarter 1997 results
Contact:Tom Schneider, VP-Finance, Royal Grip, Inc. (602) 829-9000; or
Max Ramras or Joe Dorame, RCG Capital Markets Group, Inc. (602) 675-0400
(May 14, 1997) - Tempe, Arizona: Royal Grip, Inc. (NASDAQ: GRIP) and FM
Precision Golf ("FM") announced that they have executed a definitive agreement
to combine. FM is a privately-held golf shaft manufacturer based in Torrington,
Connecticut with executive offices in Jackson Hole, Wyoming. Final terms of the
agreement indicate that current Royal Grip security holders will own 30% and
current FM security holders will own 70% of the fully diluted shares of the
combined company. On completion of the merger, after approval by the Royal Grip
shareholders and completion of other customary closing conditions, the new
parent company will be called Royal Precision Inc. and is expected to be traded
on the NASDAQ National Market System.
In addition, Royal Grip announced financial results for the quarter ended March
31, 1997. The Company reported revenues of $2.5 million and a net loss of
$803,000 or $(0.29) per share, compared to revenues of $4.4 million and a net
loss of $569,000, or $(0.21) per share for the same quarter last year.
Financial results for the first quarter of 1997 reflected lower sales due to
startup delays related to the transition of the Company's grip manufacturing to
Acushnet Rubber Company. Because of the startup delays, Acushnet provided a
$400,000 credit to the Company to be used against future grip purchases. The
credit was recorded as deferred revenue and therefore was not reflected in the
first quarter results because Acushnet can reduce the credit in 1997 by
exceeding certain grip production volumes. The Company has continued to reduce
its selling and administrative costs resulting in a decrease of $464,000 for
the first quarter of 1997 as compared to the same quarter last year.
Also, FM announced financial results for the nine months ended February 28,
1997. FM reported revenues of $15.7 million and pretax income of $1.3 million.
Danny Edwards, Chairman and Chief Executive Officer of Royal Grip commented, "We
are excited to have finalized this part of the merger process. We can now look
forward to having a stronger, more diversified company. After the merger, we
will have a great combination of experience and expertise on our side."
Chris Johnston, President and Chief Executive officer of FM commented, "With the
addition of Royal Grip to our Company, we believe that we will make a positive
contribution to the golf industry. The long-term implications of the Acushnet
alliance create a great deal of excitement with our shareholders. We will do
everything we can to finalize this merger as soon as possible."
Royal Grip is a designer, manufacturer and distributor of high quality golf club
grips and sports headwear. The Company's golf club grips feature innovative
designs and compounds and are sold to leading club manufacturers, pro shops and
retail golf centers. The Company's headwear operations produce high quality,
customized golf and baseball-style caps for sale to team outfitters, college
teams and bookstores and resorts and country clubs.
This press release includes statements which may constitute forward looking
statements made pursuant to the safe harbor provision of the Private Securities
Litigation Reform Act of 1995. These statements are subject to risks and
uncertainties that could cause actual results to differ materially from the
forward looking statements. Factors which would cause or contribute to such
differences include, but are not limited to factors detailed in the Company's
Securities and Exchange Commission filings.
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Royal Grip, Inc. and Subsidiary
Condensed Consolidated Statements of Operations
Three months ended
March 31
1997 1996
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Net sales $ 2,471,683 $ 4,357,621
Cost of goods sold 2,072,820 3,239,546
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Gross profit 398,863 1,118,075
Selling, general and administrative expenses 1,217,949 1,671,455
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Loss from operation (819,086) (553,380)
Other income (expenses), net 15,671 (15,867)
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Loss before income tax benefit (803,415) (569,247)
Income tax benefit -- --
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Net loss $ (803,415) $ (569,247)
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Net loss per share $ (0.29) $ (0.21)
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Weighted average shares used in net loss per share 2,739,275 2,734,678
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See accompanying notes to condensed consolidated financial statements.
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