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) December 21, 1996
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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The Company announced a manufacturing and supply agreement with Acushnet Rubber
Company, Inc. under which Acushnet will become the Company's exclusive supplier
of non-cord grips, with the intent to become the exclusive supplier of the
Company's cord grips as well. In addition, Acushnet is acquiring the Company's
grip manufacturing equipment pursuant to a capital lease agreement. A press
release describing the transaction is attached.
In connection with this agreement, the Company incurred significant transaction
related expenses, including stock options granted to Acushnet, severence costs,
and professional fees, which would have caused the Company to be in default of
the tangible net worth, working capital, and current ratio covenants under its
existing line of credit. The Company has received a letter from its principal
current lender waiving such defaults under the existing line of credit through
February 28, 1997. The Company is in the process of refinancing such
indebtedness.
Item 7. Financial Statements and Exhibits.
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Exhibit No. Description
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1 Press Release
2
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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: January 6, 1997 By: /s/ Tom Schneider
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Tom Schneider
Its: Vice President - Finance
3
Exhibit 1
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Royal Grip and Acushnet Rubber Company enter
strategic alliance to produce golf grips
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For Immediate Release
Contact: Tom Schneider, Vice President-Finance, Royal Grip, Inc.,
(602) 829-9000 or
Max Ramras or Joe Dorame, RCG Capital Markets Group, Inc.,
(602) 998-7555
(December 23, 1996) - PHOENIX, Arizona - Royal Grip, Inc. (NASDAQ: GRIP), a
leading golf grip and sports headwear manufacturer, announced a strategic
alliance/partnership with Acushnet Rubber Company. Beginning January 1, 1997
Acushnet will become the manufacturer and supplier of golf grips to Royal Grip.
Acushnet will acquire all of Royal Grip's existing golf grip manufacturing
equipment pursuant to a capital lease agreement. Royal Grip will discontinue all
golf grip manufacturing operations as of December 22, 1996. Financial terms of
the transaction were not disclosed. Royal Grip will continue to manufacture the
Roxxi headware line at its Oklahoma facility, focusing on continued revenue
growth and production efficiencies.
Acushnet Rubber Company, based in New Bedford, Massachusetts, is a leading
manufacturer of precision molded rubber components to such companies as General
Motors, IBM, Xerox and Ford Motor Company among others. Acushnet Rubber Company
has extensive U.S. and international manufacturing capabilities.
Danny Edwards, Chairman and Chief Executive Officer of Royal Grip, stated, "We
are pleased to be partnering with a company the caliber of the Acushnet Rubber
Company. Acushnet's leadership in the precision molded rubber components
business brings to Royal Grip world-class manufacturing and development
capabilities. Also, Acushnet has a long association with the golf industry
through its former affiliation with Titleist & FootJoy Worldwide, a leading golf
equipment manufacturer. We expect that our customers will benefit from the
product innovations and the high-quality manufacturing traditions that the Royal
Grip/Acushnet team will bring to the golf grip segment."
Mr. Edwards continued, "We firmly believe this alliance positions Royal Grip to
step up to the next level of its development. We will now focus our efforts on
leading the market in product innovation, marketing excellence and customer
service and support. We are optimistic that the future will be positive for
Royal Grip shareholders."
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Bob Burg, President of Royal Grip, said, "Acushnet has achieved the highest
quality and performance certifications and ratings a U.S. manufacturer can
obtain with their ISO 9000, QS 9001 and ISO 14001 ratings. In fact, Acushnet was
the first U.S. rubber company to obtain the ISO 14001 rating. The partnership
teams us with Acushnet's extensive engineering staff allowing us to focus on
product development for our OEM customers as well as the aftermarket. We're
excited to see this piece of our strategic development plan come together. This
transaction allows us the management flexibility to pursue 'tuck-in' acquisition
opportunities in the grip, hat and other golf-related sectors."
Tom Schneider, Royal Grip's Vice President - Finance, commented, "This agreement
provides Royal Grip with a more predictable cost structure. We expect that a
consistent cost structure will help us to be more profitable and competitive as
we move ahead. Royal Grip will be expensing the costs associated with this
transaction in the fourth quarter of 1996. These costs will include stock
options granted to Acushnet in connection with the transaction, severance costs
and professional fees."
Royal Grip is a designer 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, bookstores,
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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